Where Does COVID-19 Take Clinical Labs Next?

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It is easy to say that the current COVID-19 pandemic is a global event without precedent in human history. After all, what other event has caused airline travel to drop by 95%, ended all professional and amateur sports events worldwide, shuttered Broadway theaters and movie cinemas, closed all non-essential businesses, and required nearly all citizens to “shelter in place”?

The financial consequences to clinical laboratories and anatomic pathology groups are equally without precedent. As you will read here, in the first 12 weeks after shelter-in-place directives were issued, labs in the U.S. saw as much as a 60% drop in the daily flow of routine lab test specimens and during this time the collective clinical lab industry in the United States lost $6.8 billion in cash flow, compared to pre-pandemic levels in January and February.

The Dark Report has data from multiple lab vendors that indicate the nation’s clinical labs collectively lose about $600 million in cash flow each week that the SARS-CoV-2 pandemic continues at its current rate of new infections and deaths. Going forward, there will be some lab organizations, physician groups, and hospitals that finally run out of the financial resources needed to continue operations. It is difficult to predict how quickly that happens and how many healthcare providers close their doors forever.

Whether a billion-dollar lab company or the lab in a community hospital in a small town, every lab organization is now fighting for its financial survival, while at the same time attempting to deliver high quality lab testing services at the very moment when the nation needs them most.

In strategic planning, the key question pathologists and lab leaders need to answer is: “Where does COVID-19 take clinical labs next?” This is a question with no simple answer. At the federal level, officials at the CDC, the FDA, HHS, FEMA, and other agencies have taken some actions that proved counterproductive in addressing the challenges of the pandemic. Similarly, every state seems to have a governor with a different idea on how to manage the pandemic.

Will the pandemic subside in coming weeks as summer weather heats up the northern hemisphere? Might SARS-CoV-2 re-emerge when the fall influenza season arrives in October? The financial survival of many labs and pathology groups will depend on savvy strategic analysis and planning for these possibilities.

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