“Some services that have transitioned to retail pharmacies may essentially bring clinical labs closer to the consumer, which I don’t think labs truly appreciated since they traditionally have not had much direct access to the consumer.” —Lâle White, CEO, XIFIN
CEO SUMMARY: When XIFIN purchased OmniSYS, it put an exclamation point on the growing trend of retail pharmacies offering consumers point-of-care testing and an expanding menu of primary care services. More than 30,000 retail pharmacies use an OmniSYS informatics product. XIFIN hopes that its expertise in lab testing and diagnostics—combined with OmniSYS’ existing pharmacy relationships—will open the door to relationships with retail pharmacies.
EDITOR’S NOTE: XIFIN’s recent acquisition of OmniSYS is a strategic response to the emerging trend of retail pharmacies offering primary care services to consumers. Also, several of the national retail pharmacy chains are preparing to expand lab testing options to patients as a convenient alternative to physician offices. XIFIN’s strategy is to leverage OmniSYS’ existing relationships with retail pharmacies. (See TDR, Jan. 10, 2022.)
In this follow-up Q&A, Lâle White, CEO at XIFIN, and John King, the new president of the OmniSYS division at XIFIN, explain why retail pharmacies face new challenges with clinical laboratory test reimbursement claims, what lessons clinical laboratories and pharmacies can learn from each other, and how clinical data from medical laboratories can bolster electronic health record (EHR) systems used by pharmacies.
EDITOR: Retail pharmacy chains are making major investments to support their plans to become big players in primary care going forward. Logically, this will make pharmacies major buyers of clinical lab tests. It seems what XIFIN and OmniSYS are doing is a market example of how new players are lining up to serve this emerging class of buyers for clinical lab tests. Is that basic analysis correct?
WHITE: Yes. Along with telehealth, retail pharmacies are the new front door of healthcare. Clearly there’s a huge convenience factor of pharmacies, as they are located close to where patients live and work. Some statistics show that 95% of Americans live within five miles of a retail pharmacy. So, it’s a convenient setting for care. Many people today don’t need to travel to a big hospital campus for much of their healthcare. It makes sense that we see a huge increase in clinical services being offered at retail pharmacy settings.
EDITOR: What market trends made the OmniSYS–XIFIN combination appealing?
KING: The traditional “dispense-and-fill business model” within the pharmacy is evolving. Profit margins are getting compressed and it’s becoming harder and harder to compete because of the growth of mail order pharmacies, and services like Amazon’s PillPack.
EDITOR: What is different in how consumers and patients want to access care?
KING: That’s easy. Consumer demand is shifting towards convenient, accessible care. Pharmacies themselves are increasingly moving towards a clinical services business model. For example, because of the pandemic, we saw a further tipping point as demand for care outstripped the supply of traditional access points. As a result, legislation was passed that improved access to healthcare by expanding the scope of practice for pharmacists as providers of clinical services.
EDITOR: Did these laws help retail pharmacies?
KING: Their clinical services business model has grown to include not only immunizations and medication reviews, but also clinical encounters such as point-of-care testing, point-of-care screenings, birth control prescribing, and patient counseling. It is this expansion of scope of practice that brings us back to the laboratory. Over the past year and a half, our team at OmniSYS has been hard at work helping our retail pharmacy customers expand their business into new services—specifically point-of-care testing and point-of-care screening.
EDITOR: With the pharmacies doing so much COVID-19 testing, is the ability to file a correct lab test claim just as essential now to a pharmacy as it is to a lab?
WHITE: Yes, gathering all the necessary information for a test claim to be successfully submitted is just as critical to pharmacies as it is to labs. That’s why OmniSYS was such a great fit for XIFIN; together, they can submit clean medical claims on behalf of pharmacies to ensure they get reimbursed for the clinical services, including COVID-19 testing, that they provide to patients.
EDITOR: Will this acquisition create opportunities for a whole host of clinical labs that might otherwise struggle to get access to pharmacies?
WHITE: We believe we can democratize this arrangement through technology and open it up to multiple lab providers, as well as providers with continuous monitoring devices who specialize in disease states—without restricting access through exclusive agreements. We think there are a number of labs strategizing how they could support pharmacies. There’s a number of synergies here and the ability to offer phlebotomy services or reference lab services across the board—and not through an exclusive contract—might be something that we would explore with all of these pharmacy outlets.
EDITOR: Given all the talk about forging new relationships between retail pharmacies and clinical labs, what do you think pharmacies could learn from laboratories as this partnership grows? And what might labs learn from pharmacies about serving consumers and patients in innovative new ways?
WHITE: Pharmacies do provide a good strategic road map for clinical labs. Once pharmacies started losing their share of prescription drug orders to mail order systems and online disrupters like Amazon, they didn’t just sit idly by and accept their declining business. They knew their marketplace and understood consumer demand for convenience. This guided their rapid pivot into offering clinical services.
EDITOR: Did labs respond to these same market signals?
WHITE: By comparison, labs were slow to support the increases in the healthcare services provided by pharmacists, including their ability to draw blood and become providers of clinical services. And, during these same years, Theranos was going state by state to encourage passage of direct-to-consumer testing laws. Yet the clinical lab industry did not support that effort. However, once this was accomplished, forward-thinking labs became the beneficiaries of these new laws. Additionally, some of the services that have transitioned to retail pharmacies serve to essentially bring labs closer to the consumer, which I don’t think labs truly appreciated since they traditionally have not had much direct access to the consumer.
EDITOR: You are describing a significant change in consumers access care.
WHITE: Yes. This ongoing shift completely changes the environment for how clinical labs should operate to meet consumer demand. Labs should be much more cognizant about the fact that coordination of care amongst providers is going to be essential to their growth, especially as state and federal legislation looks at areas where healthcare is delivered the most efficiently and effectively to reduce costs.
EDITOR: How should labs respond?
WHITE: If clinical labs understand that the consumer is now a direct customer, I think they’ll see that this gives them a huge opportunity for better testing access for the average individual. People are much more inclined to participate in their healthcare than they used to be. They know a lot more about lab testing and they understand a lot more about genetic testing and its impact on their daily life choices. And so, consumers will drive their own healthcare much more than has been true. This is the landscape that clinical labs must understand.
KING: One big thing that pharmacies can learn through this process is the value of clinical data interoperability and the use of clinical decision support tools in the delivery of care. Pharmacies today are highly optimized around e-prescribing, order management, and inventory management. But clinical decision support is something that’s going to become important to pharmacies, as they increasingly will rely on data and tools that help pharmacists proactively identify intervention opportunities for at-risk patients.
WHITE: That’s an excellent point that data and access to data makes a big difference in the quality of care. I think most people talk to their pharmacists about drug interactions and side effects at a much more detailed level than they do with their prescribing physician. There’s a lot of data that pharmacists can use to assist with daily disease management tips or what type of vaccines a patient might need.
EDITOR: Does this acquisition help boost data quality between the lab and pharmacy?
WHITE: Most of the EHRs just don’t contain usable data when it comes to laboratory data. XIFIN developed a solution for oncology that provides analysis using biomarker level clinical data that they can’t get out of their own EHR. That’s made all the difference in the world in the way oncologists analyze that data and the way they use it to improve standards of care, including identifying with precision the most appropriate clinical trials provided by pharmaceutical companies. We have the same type of opportunity in pharmacies to populate the pharmacy-level EHR with the type of laboratory detail that they can now get in an automated fashion. This data sharing and integration process that we talk about—and the sophisticated technology it takes to do that—is not available in the major enterprise systems used by health systems. Our systems have been developed to facilitate data sharing between disparate entities and are designed to preserve data integrity in a manner that enables useful analysis and summaries of clinical information, including lab data, which comprises 80% of what’s in the EHR.
EDITOR: This is a significant advancement in data sharing.
WHITE: Yes, the entire process of data exchange is going to look much different. Most of the major technology companies that have tried to do data integrations for clinical laboratories have not been successful, certainly not at the biomarker level. That level of data is needed to do the right analytical job and to interface with apps that provide a tremendous amount of feedback to the consumer on how to manage their health.
EDITOR: To pick up on your earlier mention of oncology, when XIFIN handles a claim from a pathology group or a lab that involves a tissue-based biopsy, are you getting the test result report itself? And can you set up a system that provides to the referring oncologist a complete patient summary that the pathology lab itself is incapable of doing?
WHITE: Yes, we can, particularly in genetic and molecular testing. There is an important reason for this capability. For a long time, this level of data has been required to file successful appeals. Reimbursement in molecular and genomic testing is challenging; you need to know diagnostic results for a lot of those claims. But even beyond that, we have our lab information system and our clinical data aggregation system, VisualStrata, which consolidates all types of clinical data for analysis purposes. So, we do integrate with labs for their clinical data on the basis of those product lines and also for claims processing.
Contact Lâle White at lwhite@XIFIN.com; John King at email@example.com.