CEO SUMMARY: In a pilot program started in November 2015, Sonora Quest Laboratories built patient service centers in two Safeway grocery stores. That program went so well that patients filled available appointments in a matter of weeks. Sonora Quest even reported an increase in the number of walk-in, cash-paying consumers as a result of opening the two new PSCs. Following that success, Sonora Quest negotiated with Safeway to open PSCs in seven more Safeway health and wellness centers.
ARIZONA CONTINUES TO BE GROUND ZERO for efforts to expand direct access testing. This is true, in part,because of the substantial advertising that Theranos did in the Grand Canyon State in recent years to educate consumers about the benefits of purchasing lab tests without a physician’s order.
Earlier this spring, Theranos lost its relationship with Walgreens, along with the specimen collection sites it operated in 40 Walgreens pharmacies in the Phoenix region. Now Theranos is exiting the clinical laboratory business (due to sanctions the federal Centers for Medicare & Medicare Services) imposed, creating a direct access testing (DAT) vacuum in Arizona. Two companies want to fill that vacuum and are collaborating to expand consumer access to DAT.
On August 29, Sonora Quest Laboratories and Safeway issued a press release stating that their relationship would expand. Sonora Quest will staff new patient service centers (PSCs) in nine Safeway grocery stores throughout Arizona in 2016. The two companies currently operate PSCs in five Safeway stores—three in Phoenix Metro, one each in Glendale and Sedona, and as of early October, one in Tucson.
What is noteworthy in this expansion is that only one of the new PSCs will be in Phoenix. The others will be located in the cities of Glendale, Kingman, Sedona, and Tucson. It is a sign that Safeway and Sonora Quest believe there is consumer demand for patient service centers that are easier to access and more convenient to their daily routines.
Several Factors For Success
Several factors contribute to the initial success Sonora Quest and Safeway report with the initial sites overall, but specifically to DAT. First, DAT has been available in Arizona for more than two decades. LabXpress was founded in Phoenix in 1989 to provide low-cost lab tests and has a legitimate claim to be the nation’s first direct-to-patient, low cost lab company. AnyLabTestNow currently operates six franchise locations in Arizona, of which four are in the Phoenix Metro.
Second, Theranos convinced the Arizona legislature to pass a bill that made it legal for consumers in Arizona to order any clinical laboratory test without a physician’s order. The bill was signed into law and became effective in July 2015. This story was given wide play by newspapers and TV news outlets in Arizona.
Third, Theranos spent heavily on a marketing campaign to educate consumers about the benefits of ordering their own lab tests. These ads ran for almost two years and were designed to reach the majority of Arizona residents.
Strong Interest in DAT
For Sonora Quest, consumer response to direct access testing through their My Lab ReQuest offering has been encouraging. The lab company indicates it has experienced strong volume growth from the PSCs in the first two Safeway PSCs that were opened late last year.
In addition, Christina Noble, Sonora Quest’s Vice President of Business Development, told THE DARK REPORT that the state’s largest clinical lab company will continue to evaluate new opportunities, technologies, and services to expand access points of convenience to patients in the healthcare market place.
In addition to the nine grocery stores that Sonora Quest has or is moving into, the parent company, Quest Diagnostics, announced in June that it plans to open PSCs in 12 Safeway stores in California, Colorado, Maryland, Texas, and Virginia. (See sidebar .below)
“The willingness of shoppers to embrace the idea of getting blood and other patient specimens collected in the grocery store has been a pleasant surprise,” Noble said. “Late last year, when we started this pilot program in the first two Safeway stores, we didn’t know what to predict in terms of market demand for PSCs in grocery stores. We expected the best. But, at the same time, we planned for the worst because we didn’t know what would actually happen.”
Some Sonora Quest executives considered that patients might not want to have blood drawn where they shop for food, she added. Those concerns turned out to be unfounded.
how Consumers reacted
But first, Sonora Quest had to be sure that patients would get over what might be called the ‘ick factor’ of giving blood and other specimens where they shop for groceries, she added.
“We didn’t know how this idea was going to play out with consumers because there were so many unknowns about this concept,” Noble said. “However, we continue to be encouraged by the volume growth and positive feedback from patients in both locations.
“In fact, we have seen overwhelming acceptance and actual excitement and gratitude from patients because we’ve made healthcare more accessible and more convenient,” she added.
For evidence, Noble said that, in the Safeway stores where Sonora Quest opened the first two patient service centers last year, available appointments were filled to capacity within weeks of opening.
Boosting patient Volume
She would not divulge any numbers for how many patients each PSC serves each day, but she did say that many of the time slots were filled from the time the centers opened in the morning until they closed in the late afternoon or early evening. “In each store, the Sonora Quest PSC has the ability to operate on a different schedule, depending on the day of the week and the demand for such services,” added Noble.
“In both locations, we were definitely at target capacity and hit our goals in terms of patient experience and productivity in a matter of weeks,” she noted. “We met every goal we had, meaning we grew our business and created greater access points and convenience for consumers through creating these new solutions.”
In these new PSCs, Sonora Quest saw the number of walk-in consumers increase, she added. But, again, due to concerns about giving away information to competitors, Noble would not reveal the number of new walk-in customers.
“Attracting new customers was definitely one of our goals,” she added. “So, to reach that goal was very satisfying for us.
“Demand has at times been high so, rather than have patients wait for testing—we made beepers available just as they would get at a restaurant,” she said. “That meant they could shop and return when the beeper went off.
positive patient Comments
“From all this, we’ve received many positive anecdotal comments, and we’ve had positive comments in our patient surveys,” said Noble. “That is reinforced by the many positive comments that patients post on our Facebook page. In fact, 91% of survey respondents stated that My Lab ReQuest is a good value for the price they paid.”
One issue Sonora Quest needed to work out is how to use the space Safeway allotted most effectively. In each store, the PSC is located next to a Safeway pharmacy. One advantage of this arrangement is that the PSCs could share the space the pharmacists were using to administer IV medications and flu shots, she commented.
For Noble, the ultimate goal of offering PSCs where consumers shop is to make lab testing more convenient so that consumers get their lab tests done more quickly from the time their physicians order those tests.
“At some point, increased convenience should translate into bending the cost curve,” Noble commented. “If more patients get tested because they can do so in a place where they shop several times a week, it just makes sense that we will help increase compliance with physicians’ recommendations for lab testing.
“When we do that, we would expect to see costs come down and patient outcomes go up,” she said. “That’s what excites me about this program: the opportunity to improve care and reduce costs.”
Lab administrators and pathologists will recognize that Sonora Quest Laboratories and Safeway are tapping a dual source of demand with patient service centers in grocery stores. One type of patient is the direct access patient who wants to order tests without involving a physician.
The other type of patient has a clinical laboratory test order from a physician and wants a convenient draw site or the ability to pay cash because the patient lacks health insurance or has a high-deductible health insurance plan.
Contact Laura Waldron at 480-998-2600 or firstname.lastname@example.org.
Quest, Safeway Expand DAT PSCs into Five States
IN JUNE, QUEST DIAGNOSTICS INCORPORATED and Safeway announced the opening of 12 patient service centers in five states. In each grocery store, the PSCs will be next to the in-store pharmacy.
These arrangements are similar to how Sonora Quest Laboratories and Safeway have developed DAT specimen collection centers in Safeway stores in Phoenix. The PSCs have about 400 to 500 square feet each, including a waiting room. As Sonora Quest Laboratories has done, Quest Diagnostics gives patients pagers so they can shop while waiting for a phlebotomist to become available.
On the Quest website, the company shows PSCs in Safeway grocery stores in California (three stores), Colorado (three stores), Maryland (two stores), Texas (three stores), and Virginia (one store).
In addition, Quest Diagnostics and Safeway are doing what many retailers do today, offering initiatives, such a coupons, to reward customers.