CEO SUMMARY: Like other physician specialties, anatomic pathology saw a dramatic collapse in the number of daily procedures with a corresponding decline in cash flow as the COVID-19 pandemic hit with full force in March, April, and May. The good news is that the daily volume of tissue referrals is increasing steadily as patients decide it will be safe to visit their physicians. In Dallas, ProPath, a private practice with 50 pathologists and 500 employees, reports that its daily flow of tissue cases is back to 95% of pre-pandemic levels.
AS PATIENTS RETURN TO PHYSICIANS’ OFFICES AND AS HOSPITALS IN MOST REGIONS AGAIN PERFORM ELECTIVE PROCEDURES, the daily volume of anatomic pathology tissue referrals has been climbing back to pre-pandemic levels.
This is a welcome development for the pathology profession, still attempting to recover financially from the extreme collapse in the volume of tissue referrals and cash flow from March through June. As of July, many pathology groups reported increased volumes of daily test referrals after governors eased restrictions on social and business activities. Patients were encouraged enough to begin returning to their physicians for normal screening and other preventive services.
At ProPath in Dallas, the daily volume of case referrals has returned and so has revenue, said Cory A. Roberts, MD, the group’s President, Chairman, and CEO. In February, when the number of cases of COVID-19 were rising in the United States, Roberts told the ProPath team that some staff and some of the group’s 50 physicians would be furloughed and that the group would need to conserve cash to survive the pandemic. (See, “To Stay Afloat, Dallas AP Group Cut Staff, Payroll,” TDR, May 11, 2020.)
One of the nation’s largest physician-owned pathology groups, ProPath has almost 500 employees, including sales and support staff in 10 states. Its 50 pathologists serve as medical directors in 26 Texas hospitals.
Earlier this month, Roberts told The Dark Report that specimen volume at ProPath had returned to about 95% or more of pre-pandemic levels, and revenue had risen as well.
While cautiously optimistic about revenue for the remainder of 2020, Roberts also had concerns about the manypatients who put off screening tests in the spring due to COVID-19. “As some of these patients return to visit their physicians, they may be diagnosed with more advanced stages of disease and thus suffer worse outcomes and even death,” observed Roberts.
A study that researchers at Quest Diagnostics conducted confirmed his observations. In a study published in JAMA Network Open (JAMA), the researchers reported that Quest saw the number of newly-diagnosed cases of six major types of cancer decline by 46% during March. (See, “Quest Reports 46% Decline in New Cancer Diagnoses in March.” )
“After seeing this study in JAMA, I would suggest that the data on how much the volume of pathology case referrals dropped could be worse than what Quest reported,” Roberts said. “In that study, Quest compared data from January and February with data from the following months, and rightly so, because that was a comparison of pre-COVID and post-pandemic numbers,” he said. “But in gastroenterology, for example, many people don’t get screening colonoscopies early in the year. Peoplewith high-deductible health plans typically defer screening colonoscopies andother diagnostic procedures until afterthey meet their deductibles. Otherwise, they might bear more of the cost.
“That’s why office visits to gastroenterologists and other specialists in January and February are typically lower than they are at other times in the year,” he noted. “That reluctance could mean even more people may have missed their screening appointments during COVID than the article suggests.
Fewer Screening Tests
“Also, some people with less financial means may be more at risk for not getting care and screening tests,” he added. “For these individuals, screening visits might not have been a high priority even before the pandemic. Then, during COVID, screening tests are an even lower priority.
“It’s possible that some people delayed screening for a few months while others may put off screening visits for an entire year,” Roberts said. “When these delays are combined with other economic factors and a lack of income due to being unemployed, it’s likely that a lot of diagnostic work got pushed further down the road.”
For these reasons, anatomic pathologists could see a surge in specimen volume later in the year or into 2021, he added. “It’ll be interesting to see what happens as we go forward and if there is an increase in cases, worse patient outcomes, or even morbidity due to missed patient visits,” he said.
Income Stability Restored
Meanwhile, Roberts reported specimen volume at ProPath had returned to about 95% of the group’s forecasted levels, which has helped to stabilize income. The group also supplemented cash flow by running COVID-19 molecular tests. In August, it was performing 800 to 1,500 polymerase chain reaction tests per day for the novel coronavirus, boosting revenue by about $2 million, he added. (See sidebar, “Adding COVID Testing Cushioned Financial Blow,” below.)
“Our volume of tissue referrals is back almost to the levels we expected, but it varies from day to day and week to week, of course,” he noted. “The outpatient situation is different from what’s happening with inpatients. Outpatient is largely back, while inpatient volumes depend on where those hospitals are located.
“If those hospitals are in a hotspot for infections, then specimen volume may still be at about 80% of where it was,” he said. “So, while outpatient volumes are effectively back, inpatient volumes are still lagging in North Texas, though variable, even within our region.
“Another factor that affects our group’s outpatient revenue—and this is not unique to us—is that some procedures are taking much longer than they did before the pandemic,” he noted. “Colonoscopies are a good example. These procedures take longer because of the need for extra personal protective equipment and for air-handling procedures in those rooms,” he added. “In some cases, gastroenterologists can’t let people in and out of the procedure room or have to wait longer in the room. Therefore, patient throughput is slower. Not being able to do as many cases as they did before in thesame number of hours, they have extended hours and added days for scoping to try and offset that lower throughput.”
For Roberts, the COVID testing and the return to almost-normal AP specimen levels are positive signs, but his optimismwas restrained. “We started to see our outpatient work return in the second half of May,” he reported. “Since then we’ve grown specimen volume gradually. At the end of July, our group was closer to 90% of forecasted volume. Now, in August, we’re closer to 95%, exclusive of SARS-CoV-2 testing.
70% Decline in Specimens
“That’s a big improvement from the collapse of specimen volume and cashflow back in March and April, when our work went down to about 30% of forecast,” he said. That 30% of volume is a result of comparing volume in the second quarter of 2020 with the company’s forecasted growth for 2020.
While volume in the summer was better than it was in the spring, the numbers were a reminder that without the pandemic, volume might have been even higher. “Our group specimen volume in the first quarter of 2020 was running about 11% above 2020 levels, slightly ahead of forecast,” he commented.
“Now that we’re in August, it’s great that we’re back to 95% or better, compared to forecast,” he noted. “But going forward for the balance of 2020, we view our current situationwith extreme caution. I expect additional surges in viral infections when kids go back to school. And we’ll face the usual respiratory viruses in the fall.”
Adding COVID Testing Cushioned Financial Blow
ONE FACTOR HELPING PROPATH WEATHER THE ECONOMIC THE ECONOMIC STORM ROM THE SARS-CoV-2 CORONAVIRUS is the COVID-19 testing the lab added to help its hospital partners test patients before surgery. “Our COVID testing has been a big help because that’s a whole new revenue source, said Cory A. Roberts, MD, the group’s President, Chairman, and CEO.
“We collected about $2 million in COVID testing revenue through the middle of August, and we only started testing in late May. “Testing protocol rules vary from hospital to hospital, but generally every hospital wants a pre-procedure or pre-op COVID test 48 to 72 hours before the procedure,” he added. “Our test turnaround time is 24 hours.
“Right now, we average about 800 PCR COVID tests per day, but that varies depending on patient demand and supply constraints,” he added. “We’ve done as many as 2,000 tests in one day.
“We’ve had huge supply-chain problems and that currently caps us at 800 tests per day,” he said. “Too often we don’t have enough consumables or reagents because every part of the supply chain has had problems.
“Our goal is to manage the demand for COVID-19 testing so that we can turnaround tests in 24 hours and avoid a huge backup,” Roberts explained. “We run the PCR tests on the Hologic Panther platform and plan to introduce our own laboratory-developed test (LDT) for COVID by the end of August,” Roberts noted.
“For our LDT, we anticipate the same supply chain constraints, specifically with pipette tips. Therefore, we’ll probably run about 200 of those tests each day. We also did some antibody testing, but demand has never been very high.”
Contact Cory Roberts, MD, at 214-237-1641 or Cory.Roberts@propath.com.