Dive Brief:
- Quest Diagnostics is reporting extended COVID-19 molecular test turnaround times for the first time since 2020 amid an omicron-driven surge in testing demand.
- It is now taking Quest two to three days to deliver test results, on average, compared to the one-day turnaround time it achieved throughout most of last year. Quest last reported a two to three day wait for results in December 2020.
- Chief rival Labcorp appears to be faring better so far, with a spokesperson saying its turnaround times are still averaging one to two days. Quest and Labcorp both have capacity for approximately 300,000 tests a day but the lab giants warn that it is an evolving situation and turnaround times can vary by region and fluctuate with demand.
Dive Insight:
Quest and Labcorp were overwhelmed in the early months of the pandemic, with the former taking seven days or longer to deliver results and its chief rival only doing a little better. However, both labs got a handle on the situation by the summer of 2020.
The winter COVID-19 wave caused Quest's turnaround times to extend to two to three days in November and December 2020 but they remained at two days or less throughout 2021. Quest continued to report most tests within one day even as the delta wave disrupted other parts of the healthcare system in the fall.
When omicron hit last month, Quest said it was "well positioned to accommodate potential increased demand." Yet, facing a surge in demand, Quest has been forced to act as turnaround times have started to grow once again.
"We are taking measures to strengthen our capacity to meet rising demand, such as using our national courier, air fleet and logistics network to balance volume across approximately two dozen COVID-19 testing laboratories. We have also reactivated our laboratory referral partner program, which involves directing excess volume to commercial and academic labs that provide quality COVID-19 testing," Quest said in a statement.
Labcorp’s COVID-19 testing operation is a similar size to that of Quest. Over the course of the pandemic, Quest has performed around 7% more molecular tests than Labcorp.
The omicron wave looks to be having slightly different effects on the two companies, though.
"Labcorp has capacity to meet growing testing needs. Our average time to result for COVID-19 PCR test results continues to be 1-2 days," a LabCorp spokesperson said in an emailed statement.
News of the extended turnaround times at Quest follows an HHS Office of Inspector General report into Medicare Part B spending on lab tests in 2020. The report shows Medicare Part B spent $1.5 billion on COVID-19 tests in 2020, although the outlay was offset by a $1.2 billion drop in spending on other tests.
"The top 25 lab tests by Medicare payments totaled $4.99B in 2020 (62% of total spending), up from $4.64B in 2019. Independent labs such as Bio-Reference, Labcorp, and Quest receive more than 80% of their Medicare revenues from services paid under Medicare's Clinical Lab Fee Schedule (CLFS)," analysts at Cowen wrote in a Tuesday note to investors.
Reviewing a separate OIG report about orders of genetic tests, the analysts said the findings raise "concerns about excessive ordering/possible fraud and may result in additional oversight from OIG or Congress."
