Babson Diagnostics’ Hybrid Model Combines Quality, Convenience

Goal is to serve customers by collecting small samples in retail pharmacies

CEO SUMMARY: Responding to its own data about consumer preferences, healthcare technology company Babson Diagnostics is pursuing a new hybrid model for blood draws that it believes brings together the best of clinical laboratories and retail pharmacies. Laboratory managers and pathologists may find opportunities in such an approach. 

TWO EMERGING TRENDS HAVE THE POTENTIAL to significantly alter the clinical laboratory industry in fundamental ways. Moreover, a young diagnostics company in Austin, Texas, is working to deliver new technologies it hopes will accelerate the adoption of these new trends. 

One trend is to bring specimen collection services closer to the growing number of customers who are moving from conventional patient service centers (PSCs) operated by clinical laboratories to alternative collection sites, particularly retail pharmacies. The second trend involves using technology to create a new collection method that: 

  • Is friendlier to patients, 
  • Requires much smaller quantities of samples, and, 
  • Can be used by labs to deliver accurate, reproducible results using most existing analyzers. 

These trends are consistent with the expectations of today’s informed healthcare consumer. These consumers want personalized care, convenient access to medical services, transparency in quality, along with digital access to scheduling and clinical laboratory test results. 

The diagnostics company that wants to be at the intersection of these trends is Babson Diagnostics. Founded in 2017, it has raised more than $44.6 million from investment groups that include Siemens Healthineers. 

Clinical laboratory administrators and pathologists interested in keeping their respective labs’ strategies tuned to the realities of today’s healthcare marketplace will find it useful to understand Babson’s market predictions and the diagnostic technologies it is developing. 

At last spring’s Executive War College Conference on Laboratory and Pathology Management, Eric Olson, Founder, Chairman, and Chief Operating Officer at Babson Diagnostics explained the innovations unfolding at his company in a presentation titled, “Clinical Lab Services for Today’s Healthcare Consumer: Delivering Value with Accessibility and a Better Collection Experience.” 

The intelligence briefing that follows is organized around the primary topics about which Olson spoke during his presentation: 

  • Consumers and Site of Service: Why moving specimen collection into retail pharmacies and similar settings better meets the expectations of today’s healthcare consumer while also benefitting clinical laboratories. 
  • New Hybrid Collection and Test Model: Babson explains the hybrid model, which decentralizes specimen collection and centralizes the testing of the specimens. 
  • New Specimen Collection Technology and Devices: How an alternative method for capillary blood specimen collection improves the patient experience and reduces the volume of sample required for many types of basic clinical laboratory tests. Equally important, why it will reduce the need for trained phlebotomists, including an overview of the clever designs of the different products under development to enable collection of smaller samples and their testing at the lab. 
  • Centrifugation of Smaller Samples for Testing by the Clinical Lab: What is required for high volume laboratories to analyze the smaller quantities of capillary blood samples while maintaining accuracy. 
  • Validation of Lab Assays Using Capillary Blood and Tested on High-Volume Analyzers: Babson’s team is conducting the validation studies necessary to demonstrate that capillary blood samples collected with the company’s technology consistently deliver accurate, reproducible results when tested by high-volume instruments. 

Before proceeding, it is useful to note that the trend of consumers preferring to access services located in retail pharmacies and grocery stores is now in its sixth year. The Dark Report was first to recognize this trend and explain why, going forward, clinical laboratories would need to put PSCs in retail stores throughout their service area if they were to remain competitive. (See TDRs, “PSCs in Safeway Stores Popular with Consumers,” Oct. 17, 2016, and “Labcorp, Quest Diagnostics Open PSCs in Retail Stores,” Oct. 30, 2017.) 

TOPIC ONE: Consumers and Site of Service 

This fast-moving trend is fueled by a simple fact: patients and consumers prefer to go to a retail store near their home or office to have their blood drawn. Experience shows that when a lab opens a PSC in a retail pharmacy or grocery store, that PSC’s appointment book fills up rapidly. The additional benefit to the lab from a busy PSC is that it increases the phlebotomists’ productivity and lowers the cost of collecting lab specimens. 

Today’s consumers have high expectations for service. For example, over the past 10 years, there have been dramatic changes in how consumers purchase retail items and how those consumers travel. In retail, relevant examples are Amazon, eBay, and Carvana. In the travel industry, companies such as Expedia, Uber, Lyft, and Airbnb have been in the forefont of delivering personalized options.

In the same fashion, consumers have subsequently reset what they want from primary healthcare providers.

Eric Olson at Babson Diagnostics
Eric Olson

“Consumers expect that things be made simple and be put on their phones,” noted Olson during his presentation at the Executive War College. “They want to interact with every service in the most convenient way possible. We see that across all industries. The consumer experience has become an e-commerce experience. This holds true for how consumers want to access lab testing services.”

Observant lab managers and pathologists will recognize Olson’s points. Healthcare consumers—particularly those under 40—want a smooth, fast, and easy experience with retail and service providers, including clinical laboratories. (See TDR, “Millennials Set to Reorder Healthcare and Lab Testing,” May 3, 2021.) 

New Testing Solution 

Babson Diagnostics is working with Becton, Dickinson and Company (BD) and Siemens Healthineers on a new testing solution using capillary blood samples collected at retail pharmacies. 

“During consumer preference research we conducted, we learned what consumers and patients value and prefer,” Olson said. “Overall, results pointed to a desired change in how blood is collected.

“Accuracy of diagnostic test results was the most important factor to those surveyed, followed by customer service and short wait times,” he continued. “Costs and financial issues are also important, but not at the level of being treated well and getting accurate test results.”

Opportunities to increase customer satisfaction, according to Babson Diagnostics’ data, come from friendly service, evening and weekend appointments, walk-in access, and quick results.

Collection Location, Method

Meanwhile, 85% of consumers who experienced Babson’s collection method preferred the pharmacy as a blood collection site over more traditional settings—such as a patient service center or physician’s office. Reasons cited include a better overall experience at a pharmacy, staff professionalism, and proximity to home. 

These findings corroborate trends that the SARS-CoV-2 pandemic accelerated regarding the influence of retail healthcare locations. Patients continue to recognize the convenience and time-savings of going to a retail pharmacy for services over a hospital or physician’s office.

Olson also theorized that retail sites are more in tune with customer service. “The retail pharmacy is much closer to where most patients live and work than a doctor’s office,” Olson stated. “Retail pharmacies are also a place where employees are trained in customer service. It is part of the DNA of these companies to treat customers right.” 

Further, Babson found that 81% of those who experienced Babson’s collection method preferred the capillary blood collection method over venipuncture. Reasons cited include capillary collection being less invasive, avoidance of vein collection difficulties, and quicker and less painful draws.

“The biggest concern we heard from customers about venipuncture is the anticipation of the needle,” Olson commented. “The next biggest concern is being able to see the blood. The overarching theme mentioned by patients is the feeling of invasiveness when lab specimens are collected. 

“To alleviate these patient concerns, Babson developed a next-generation fingertip capillary blood collection device in partnership with BD,” he added. “That device is for use by a non-phlebotomist to collect blood from the patient’s fingertip. The sample is stabilized at the pharmacy, using a sample preparation device that automates all of the pre-analytical processes for blood testing.

“This technology will de-skill the process of blood draws,” Olson continued. “The collection process is now in the hands of somebody who works at the pharmacy counter. There’s no longer the need to rely on a dedicated, highly skilled phlebotomist.” 

Pharmacy Blood Draws

Babson’s innovations are designed to enable blood draws to simply become another healthcare service offered by the pharmacy. “In addition to filling prescriptions and doing vaccinations, pharmacy staff will also be able to perform blood draws,” Olson explained.

This model, if successful, would reduce the bottleneck for blood draws caused by a limited number of phlebotomists and potentially change the hiring environment for this job.

TOPIC TWO: New Hybrid Collection and Test Model

Olson next explained that this approach is not rapid testing because the specimens go to a core laboratory for analysis. “Our business model is not point-of-care testing,” he emphasized. “It is ‘distributed collection’ where the sample goes back to a high-complexity laboratory with high-throughput equipment incorporating state-of-the-art methods overseen by laboratory professionals. 

More Convenient Process

“The laboratory then reports that result to both the customer and the clinician that ordered it,” Olson noted. “This is our approach to making blood collection a more convenient, pleasant process. 

“It is important to recognize that this is a new hybrid collection and testing model,” he added. “Our business model decentralizes the collection process and centralizes the analysis process.”

Babson’s hybrid model also seeks to address lab preanalytical errors. For example, one common problem is mislabeling collection tubes before patient draws. Babson’s process may sidestep that pitfall by using tube barcodes pre-printed on the container itself. With this option, staff do not need to print and place sticker labels on tubes at collection time. 

“Pre-printed barcodes are applied irreversibly by the manufacturer with a tube number that gets digitally matched to the customer at the time they present to get tested,” Olson said. “So, the sample is married in a very different way. There are no stickers in this process. There are no opportunities for mislabeling. The tube is scanned before the collection and after the collection to confirm the right person is matched to the right tube.

Automated Sample Prep

“Our technology is designed for simplified automated sample preparation,” he continued. “There won’t be the need to have someone timing the clot. Nor will there be the need to have someone starting the centrifuge. The benefit is less cost and reduced turnaround time. 

“There won’t be the need to have someone timing the clot. Nor will there be the need to have someone starting the centrifuge.”

—Eric Olson

“The beauty of this distributed collection model is that the high unit cost of a point-of-care test is avoided because these specimens go into the central laboratory, where tests can be performed for 10, 20, or 30 cents. This plays to the strengths of core labs.

“Babson Diagnostics is not here to disrupt the laboratory,” he noted. “Babson is here to build on the strengths of what makes clinical laboratories great. Labs have the best quality available, the lowest cost structures available, and the professional oversight that’s needed to have confidence in the results the clinical laboratory delivers.” 

TOPIC THREE: New Specimen Collection Technology and Devices

There are three technology and design innovations that are fundamental to Babson’s hybrid model of clinical laboratory testing:

  • First is a novel specimen collection device.
  • Second is a novel automated “sample preparation device” for use in the pharmacy or retail location. 
  • Third is a novel centrifugation technology that enables high-volume laboratory analyzers to run small capillary blood samples.

Collection Device: The collection device is designed to fit over the patient’s fingertip in such a fashion that the patient will see neither the needle nor the blood that is collected.

Sample Preparation Device: The sample preparation device is to be used by pharmacies to automate all the processes required before delivering the sample to the central laboratory for testing. Babson believes this will improve specimen quality and integrity. 

“This device automates the sample mixing process. It tracks the sample to make sure it’s clotted for exactly the right amount of time and then automates the centrifugation process. It has refrigeration to control the storage temperature and it has transport carriers,” Olson explained. 

“So, it’s automating all those steps at the pharmacy, because if you de-skill the collection process, but you don’t de-skill the preparation process, you still encounter the same bottlenecks. This is why we’ve made the preparation step completely automatic.

Collecting the Sample

“Thus, the pharmacy technician collects the blood sample, takes the tube off, puts it in this device and it automates the remaining processes,” Olson noted. “The pharmacy techs do not need to think about those processes once the sample is loaded. 

“Our risk analysis involved studying different steps that happened during the preanalytical phase—the errors that happen, the frequency, the detectability, the impact of those errors,” he said. “That helped us identify which errors we can mitigate and which ones we cannot.”

Centrifugation Technology: Because the sample is of capillary blood, Babson faced the challenge of how to centrifuge it and deliver it to the high-volume analyzer to reduce wasted sample volume and avoid gel clogging the instrument probe. 

TOPIC FOUR: Centrifugation of Smaller Samples for Testing by the Clinical Lab

To allow the smaller volumes of capillary blood samples to be tested in high-volume laboratories, engineers developed special centrifugation technology. 

“Because high-volume analyzers are designed to run with big samples, we had to engineer a solution that allows the analyzer to run our small sample,” Olson commented. “We engineered a novel centrifugation process to maximize the volume available for analysis. 

“In a conventional serum tube, after centrifuging the sample, the thixotropic gel creeps up and forms a protective layer between the clot at the bottom of the tube and the clean serum. That leaves the clean serum at the top, which is what we want to test. Our solution was simply to engineer the sample tube so that it is flipped upside down when centrifuged,” Olson observed. “This packs the red blood cells into the specially-designed cap of the tube. Next, the thixotropic gel is packed against those cells and the serum is at the top. 

“The benefit comes when we flip the tube upright,” he added. “The serum settles to the bottom, and the clot and protective layer of thixotropic gel remain trapped in the cap. The result is when you take that cap off, now you’ve got just the clean serum. 

“This totally removes the gel layer and the blood cells so that it is now possible to do primary tube aspiration and get all the way to the bottom of that tube,” he said. “The lab benefits from not doing a pour off, not doing any more labeling, and not losing any sample during an aliquoting step. Plus, the risk of the probe getting clogged by gel is eliminated.”

TOPIC FIVE: Validation of Lab Assays Using Capillary Blood and Tested on High-Volume Analyzers

To confirm the performance of its sample collection and miniaturized analytical methods, Babson Diagnostics is conducting rigorous validation studies for the assays to show that its method of collecting and processing specimens produces results that are accurate and reproducible when run on high-volume analyzers. 

“The final technical challenge is demonstrating diagnostic grade quality at every step,” Olson stated. “We are doing clinical studies that include method comparisons. These involve capillary blood samples collected using this collection device at a retail pharmacy by a pharmacy tech or a pharmacist who has trained on this device. The sample goes through the automated sample preparation process.

“Each sample goes through reverse centrifugation,” he said. “It gets loaded on an analyzer, and it gets tested on a miniaturized method that takes less sample volume. We track any error rate from all of those actions. The results are then compared to conventional testing. 

Comparing the Differences

“That means the same individual also was drawn by a professional phlebotomist using a needle in the arm with a Vacutainer,” Olson noted. “But that specimen is run through conventional sample prep, timed clotting, conventional centrifugation, and then loaded on a big analyzer using a full size, FDA-cleared method. We’re comparing differences between all those things.

“These studies show excellent correlation,” he added. “We share our clinical study results liberally with our partners and the people with whom we work. Many of the retail pharmacy chains that you know have seen all of these results.”

Disruptive Innovations

Babson Diagnostics is an example of a new class of diagnostic company that is preparing to come to market. It is creating a novel service model for clinical laboratory testing designed to meet the changing preferences of consumers and patients. 

It is interesting that, should Babson’s hybrid model of decentralized sample collection married to centralized testing catch on in the marketplace, it has the potential to greatly reduce the number of phlebotomists needed by clinical laboratories to collect specimens. 

This is one intriguing aspect to Babson’s vision for a hybrid model of decentralized sample collection in tandem with testing done at high-volume clinical laboratories. 

Across the nation, clinical laboratories are challenged to hire, train, and retain adequate numbers of phlebotomists. Thus, should Babson’s new technologies obtain clearance by the Food and Drug Administration (FDA) to be used in clinical settings, they collectively would offer clinical laboratories a solution which reduces the reliance of labs on phlebotomists as the primary resource for specimen collection. 

That could be a major benefit to both consumers and labs alike. 

Strategically, clinical laboratory managers may want to track Babson Diagnostics’ progress at introducing these unique blood draw and centrifugation technologies into daily patient care.

Contact Eric Olson at


How Babson Diagnostics’ Hybrid Model Works 

HERE IS HOW BABSON DIAGNOSTICS’ BLOOD TESTING SYSTEM works, according to Founder and COO Eric Olson.

Tests are ordered digitally: Clinicians submit test requests through an electronic medical record portal and customers place test orders online. Customers choose their preferred pharmacy location, pay online, and supply insurance information. Both the customers and clinicians receive results within 48 hours. 

Pharmacies serve as collection sites: A pharmacy technician collects a pea-sized blood sample from the customer’s finger. The capillary blood collection device attaches to a person’s fingertip and works with reverse centrifugation as opposed to conventional centrifugation, Olson said. It is designated as an investigational device by the U.S. Food and Drug Administration, and “requires additional studies to make any definitive conclusions about safety or efficacy,” according to a news release.

“The top of the device is squeezed to take blood from the fingertip. No vacuum force is applied. Blood flows down and out of the incision, and comes to the bottom of the device’s tube,” Olson explained. “It is a device that can easily be used by a non-phlebotomist.”

The sample preparation device, about the size of a desktop computer tower, includes a caddy that holds the supplies needed for the procedure. 

“The pharmacy team member collects the blood sample, takes the tube off the collection device, and deposits it in the sample preparation device, which automates the labeling, accessioning, sample mixing process, clotting, centrifuging, and refrigeration of the sample,” Olson said. 

Central labs analyze the samples. Samples are brought from the collection site to a central laboratory for analysis on high-volume analyzers.


By 2027, Financial Analyst Predicts $8 Billion Market Valueas More Primary Care Shifts to Retail Pharmacies

PRIMARY CARE CLINICS IN RETAIL PHARMACIES AND GROCERY STORES may soon be known as “retail clinics,” and it is a market that is projected to grow to as much as $8 billion globally by 2027. What is noteworthy here is that industry analysts are beginning to study this emerging section of healthcare in the U.S. 

“These clinics are located in easily accessible places, including malls, shopping plazas, and stores,” according to The Insight Partners, a business research firm that released a report on the retail clinic market in November. “They are ideal to treat acute health issues such as sinus infections, strep throat, urinary tract infections, flu shots, bronchitis, ear infections, ringworm, and immunizations, which are simple to diagnose.”

Taken in tandem with our briefing about Babson Diagnostics’ hybrid approach to blood draws at retail pharmacies, this latest news about the retail clinic market points to a large opportunity for clinical laboratories and pathology practices looking to expand their reach in local communities.

New Consumer Preferences

By The Insight Partners’ estimates, the retail clinic market was worth $3.4 billion in 2018 and may grow to $8.1 billion by 2027—a 138% increase over a nine-year period. 

Changing consumer preferences on how and where to receive primary care services plays a large part in the growing phenomenon, said The Insight Partners. 

Although not noted by the research firm, the fallout from the SARS-CoV-2 pandemic also heavily influenced the market for primary care in retail sites because patients became more accustomed to seeking tests outside a hospital or physician’s office.

Few healthcare leaders have established relationships with retail sites that offer primary care services, according to findings from the New England Journal of Medicine Catalyst Insight Council published in October and reported on by the American Hospital Association (AHA).

“Despite the growth of retail health clinics, only 15% of respondents own or have a formal relationship with these outlets; another 10% say their organization is planning an affiliation within the next three years,” the AHA noted.

Retail Options Expand

Meanwhile, some retail chains are aggressively pursuing healthcare offerings. For example, in October, Walmart Health announced it would open 16 new health clinics in Florida by fall of 2023.

Walmart Health has 32 clinic locations in Arkansas, Florida, Georgia, Illinois, and Texas. The clinics—which are located next to Walmart stores—offer primary care, laboratory tests, X-rays, behavioral health services, dental, and select specialty services. The Florida expansion correlates with population growth in the state.

“As the population in Florida continues to grow at more than double the rate of the rest of the United States, so does the need to increase access to quality healthcare,” said David Carmouche, MD, Senior Vice President of Omnichannel Care Offerings at Walmart in a press release.

Walmart and other companies such as CVS Health and Kroger are operating as a cog of a larger effort to control a revamped healthcare industry, said columnist Robert Pearl, MD, on the site.

“To dominate all of healthcare, [retailers] can’t be reliant on (or held hostage by) any of the legacy players,” Pearl noted. “Instead, they want their own pharmacies, health insurance plans, clinics, and physicians.”


IVD Companies among Babson’s Partners 

BABSON DIAGNOSTICS’ WORK IN DEVELOPING A CAPILLARY BLOOD COLLECTION SYSTEM has benefitted from partnerships with leading in vitro diagnostics (IVD) companies Becton, Dickinson and Company (BD) and Siemens Healthineers.

Since March 2017, Babson has closed on $44.6 million in Series A and B funding, which included support from investor Siemens Healthineers and other financial partners. 

Meanwhile, BD and Siemens have helped with Babson’s technology progress.

“We’ve partnered with BD for sample collection and with Siemens for sample analysis,” said Eric Olson, Founder, Chairman, and Chief Operating Officer at Babson. “We have leading med tech companies in the field supporting us to bring all this technology to market. This is not a hill that a typical startup company can climb without a lot of help.”

The BD Vacutainer venous blood collection device has significant market penetration in the blood draw industry. BD’s participation with Babson paints a picture of an IVD company that wants to continue to have a strong foothold in the market regardless of the technology behind a blood draw.




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