HealthcheckUSA Makes Progress With Consumers

Founded in 1987, the company has plenty of experience in direct access lab testing

CEO SUMMARY: There’s a story behind the story at HealthcheckUSA, one of the nation’s best-known sources offering consumers direct access to laboratory testing. Its primary business is holding community screens and grocery store lab testing programs throughout the United States. Because it is a middleman, HealthcheckUSA farms out the actual testing to contract laboratories.

WHEN IT COMES TO direct access laboratory testing, HealthcheckUSA is one of the industry pioneers.

The company, based in San Antonio, Texas, was founded in 1987. “The original vision was to encourage consumers to take proactive steps to preserve and improve their health,” stated Holt Vaughan, Executive Vice President at privately-owned HealthcheckUSA. “We started by offering screenings at grocery stores in San Antonio.

Strong Consumer Support

“Consumer response was so strong that we expanded our grocery store screening program to other Texas cities,” he continued. “Next, we developed a program of community wellness screening. Once the Internet matured in the mid-1990s, it was logical to establish a direct access testing program on the Web.”

The use of the term “screenings” is intentional. “The general perception is that ‘health fairs’ implies a free service,” noted Vaughan. “By using the term ‘screening’, our customers expect to pay for the laboratory testing we offer. It identifies our event in an appropriate manner.”

The business model developed by HealthcheckUSA has many surprises for laboratory administrators and pathologists. First, it is strictly a cash-and-carry business. HealthcheckUSA does not bill insurance companies. Second, it doesn’t do any lab testing in-house. All analytical work is farmed out. Third, at its grocery store screenings, phlebotomists are present and do the draws onsite. Consumers are comfortable with the setting and regularly show up for additional testing.

THE DARK REPORT asked Vaughan to explain the details of this unique business model. There are three product offerings and each operates with fundamental differences. First is the grocery store screenings.

“This is our basic business,” said Vaughan. “In Texas, we operate permanent teams in San Antonio, Austin, Houston, and Dallas/Ft. Worth. Each day these teams set up and offer testing in a single grocery store. It takes about three months for them to rotate around all the participating grocery stores in that city. It is a circuit they continually repeat.

“Customers show up, select their tests, pay us, and have their blood drawn by phlebotomists on site. Results are reported in a variety of ways, at the option of the customer,” he noted.

Community Screenings

“Our second line of business is community screening,” continued Vaughan. “We frequently offer this in partnership with other entities, including not-for-profit organizations. We arrange community screenings in cities throughout the United States. Teams for these events are assembled using temporary placement agencies.

“The third business line involves the Internet. Consumers go to our Web site, select the lab tests they want performed, pay us, and are directed to collection sites in their neighborhood to have their blood drawn,” Vaughan said.

Because HealthcheckUSA has no laboratory testing facilities, it subcontracts this work. “We have contracts with all of the major national laboratories,” observed Vaughan. “We also use about ten smaller laboratories in selected cities around the United States.

Building A Customer Base

“Remember, HealthcheckUSA is a middleman,” he stated. “We are a facilitator and a marketing specialist. Our primary strength is building customer relationships. We believe clinical labs can do the testing cheaper and better than we could if we tried to establish our own laboratory.”

In fact, Vaughan says HealthcheckUSA is looking for to contract with additional laboratories. “We would like to develop collaborative relationships with more local laboratories,” he commented. “We have a franchise program for local laboratories. We want to work with labs willing to proactively promote HealthcheckUSA and our lab testing program. Besides handling all the lab testing generated from screenings in its area, we refer patients into that laboratory’s patient service centers for collections.”

Over the years, HealthcheckUSA has responded to customer demand with three additional services related to its core offering of laboratory tests. “First, we introduced physician interpretations through the Virtual Medical Group. A board-certified physician will interpret the test results. The customer can request this and we charge an additional $30 for this service,” said Vaughan.

“The second service we’ve added is on-site blood draws,” he continued. “Many people wanted testing, but could not get to our screening site. For a $49 fee, we will send a phlebotomist out to their home or business to do the collection. This has met with very favorable response.

On-Line Lab Test Results

“The third service we initiated based on customer interest was on-line access to laboratory test results. Not surprisingly, a growing proportion of our customers opt to get their results this way,” concluded Vaughan.

For customers using a LabOne-contracted collection site, results can be viewed and downloaded through the LabDat, Inc. system. This arrangement shows how HealthcheckUSA, in its middleman role, avoids the cost of building infrastructure needed by most labs.

HealthcheckUSA’s menu of lab tests is available on its Web site: www.healthcheckUSA.com. On each order, it adds $12.00 for shipping, handling, and processing.

Although HealthcheckUSA does not bill insurance companies, it will provide appropriate CPT codes for customers who want to seek reimbursement through their own health insurance plan. “In general, our customers expect to pay out-of-pocket for their lab tests. There are not many folks who intend to pursue reimbursement from their health plan,” explained Vaughan.

Contrarian Ideas

THE DARK REPORT observes that HealthcheckUSA is doing some contrarian things in the marketplace. Popular wisdom is that people do not want to have their blood drawn in public places like grocery stores. Yet HealthcheckUSA has built an ongoing business with exactly this service.

Contracting to use existing laboratories’ testing resources and support infrastructure allows HealthcheckUSA to concentrate on marketing and the client services it provides to its customers. Healthcheck USA doesn’t own the resources, but “rents” their use as appropriate.

Vision And Persistence

Of course, HealthcheckUSA was founded by an entrepreneur willing to champion an unorthodox concept back in 1987: people interested in proactively managing their health would be willing to pay out of pocket for relevant laboratory tests. Founder George Vaughan, Ph.D., M.B.A, is an organic chemist armed with business school insights. His energy and persistence was the driving force in making HealthcheckUSA one of the leading sources of direct access testing in the United States today.

Laboratory directors and pathologists should not overlook opportunities yet to come in direct access testing. Media coverage is growing. Time Magazine did a story last October. In the past month, U.S. News and World Report and the New York Times both did extensive stories on this topic.

This is validation that the consumer movement in healthcare continues to gather strength. Laboratories should prepare to serve this potentially lucrative market!

Lab Testing Gold From the Internet

HEATHCHECKUSA OF SAN ANTONIO, TEXAS has an interesting lesson to teach about building a lab testing business on the Internet.

“We are amazed and overwhelmed at how the Web’s underground communication works,” stated Holt Vaughan, Executive Vice President at HealthcheckUSA. “From the time we first established our Web site, the rapid growth in hits and paying customers has been astonishing.

“From the earliest days, customers found out about our company and our Web site indirectly,” he explained. “They would learn about us in chat rooms. Discussion groups on disease-specific Web sites were another big source. People found us through the unlikeliest sources.”

According to Vaughan, growth in Web hits has been exponential since the site became operational in the mid-1990s. “If I use the year 2000 as a base,” he noted, “ business attributable to Web use increased 200% by 2001 and another 200% by the end of 2002.”

Vaughan declines to give specific revenue numbers. But he does acknowledge that HealthcheckUSA’s mailing list includes 100,000 people and that 41% of first-time customers become repeat customers with the company.

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