Wouldn’t you like to be able to order a doctor or nurse on demand, like you can click a few buttons on your Uber app to order a ride wherever you want to go? The on-demand economy meets healthcare delivery. While there are a few companies attempting some variation of this concept, the reality is that healthcare delivery is so much more complex than getting a ride home from the bar on a Saturday night.
Getting a “doc on demand” or a “nurse nightingale” at the press of a button is one thing. Why not a proctologist at your fingertips (pun intended), or a pulmonologist in the palm of your hand? But what if Uber tried delivering you the healthcare you get from all those folks who do the hands on work of it, like the medical assistant who takes your blood pressure, records the five extra pounds you didn’t know you gained since the last time you visited the doctor, and gives you the flu vaccine. Or what about the x-ray tech who jokes with you about “protecting the family jewels” as he places that lead blanket over your groin before zapping radiation at it? Or how about the kid who draws your blood at the clinic lab? All of these are allied healthcare workers who provide you the hands on care you need. They work under the direction of and are supervised by a licensed medical practitioner. They are not, of themselves, qualified to, or authorized by any regulatory body to provide any of that to anyone without that direct supervision and control. In short, these are sub-licenced personnel. They are not qualified to be self employed practitioners of radiology, or clinical pathology, or… phlebotomy.
And yet, as noted above, there are a few companies attempting to do this. One such recent entrant into this effort at “Uberizing” healthcare is “Get Labs”. While I am a bit surprised they didn’t try to come up with some “uber cool”, silicon valley-esque, reality bending name for the company, I am not surprised by this latest effort. I mean, come on, compared to universe shattering names like “Meta”, and “Alphabet”, “Get Labs” just seems lame. But I digress.
This new boy in town, however, is not so new. I mean, the whole idea has been tried – and failed spectacularly. Have you heard of a company called Iggbo? Now, there’s a name to remember! No, you probably don’t recognize that name either. But that’s because they don’t exist anymore. Well, to be clear, the company had to “rebrand” and reinvent itself after only a few years in business.
Who & What is Iggbo?
Iggbo was formed in 2015 by Shaiv Kapadia, Nuno Valentine, and Mark Van Roekel. The company sold “service connections” to laboratories, practitioners and phlebotomists. They offered phlebotomists who provided blood draws to laboratories and practitioners. But Iggbo, like Uber, was a technology company, not a direct service provider. They did not actually perform the service, they only provided a platform on which transactions could occur between buyer and seller, like when you (buyer) purchase a taxi ride from a taxi driver (seller) through Uber’s mobile app. It’s the same transaction model that Igbbo was using. A Laboratory (buyer) wants to purchase phlebotomy services from a phlebotomist (seller), and Iggbo facilitated that transaction.
Seems simple enough, right? But underneath this thin veneer of simplicity is a morass of complexity desperately masquerading as legal. But what makes this transaction model so dangerous for delivery of allied healthcare? Before we examine that question, we need to first take a good look at the context in which this attempt at applying the Uber model to the laboratory industry is occurring.
The History of Mobile Phlebotomy – How did we get here?
Born from the laboratory testing industry, the mobile phlebotomy industry is relatively new, and yet complex, multifaceted, logistically and technically challenging, and still struggling to define itself. Organizations that seek to engage in the practice of mobile phlebotomy should carefully consider these factors and build a venture upon the laboratory industry’s best practices.
While diagnostic innovation has expanded in recent years, thanks to advances in bioscience and technology, industry infrastructure required to facilitate this work has not kept pace. In fact, the laboratory testing industry itself has only just finished a decades long period of consolidation and regulatory maturation. Biotech companies, specifically diagnostic assay developers, wishing to commoditize their testing products, have been hamstrung by a marked lack of partners among established laboratories whose brick and mortar infrastructure can be utilized as product delivery channels. In other words, there aren’t enough local and regional, independent medical testing laboratories left with whom biotech companies can partner to facilitate specimen collection so that they can sell the new diagnostic tests they develop directly to prescribers. The remaining large corporate medical diagnostic reference laboratories, like Quest Diagnostics and Laboratory Corporation of America (LabCorp), now view most diagnostic assay developers as acquisition targets or competitors.
In addition, there are many smaller specialty diagnostic laboratories who have resisted and survived the industry consolidation phase of the last few decades. These laboratories have survived in large part to owning some proprietary testing method and/or product(s). But, because these labs don’t have the brick and mortar presence that the big corporate labs do, their growth is largely constrained to targeting only practitioners that perform specimen collection in office, which severely limits their potential customer base.
For both of these sectors, attempting to partner with the big corporate labs, or even other local regional outpatient or hospital labs to leverage their outpatient service centers is a little like letting the fox into the hen house. Furthermore, partnering with other laboratories to leverage their brick and mortar puts these companies in a very weak position to control the preanalytical process and ensure quality sample collection as well as quality service delivery. Other labs have zero vested interest in their success, and successful ventures exert control over nearly every aspect of their business. Conversely, direct hiring phlebotomists to perform mobile and on-site work is a highly risky proposition unless the organization is prepared to provide regular full time employment to attract the highest quality candidates, the requisite regulatory training, oversite and direction to ensure compliance, and have the systems necessary to implement, maintain and manage the logistical issues inherent in managing a mobile workforce. And while many biotech companies seem to be flush with investment dollars, it is exceptionally costly to build out a national brick and mortar presence and would require the resources of a fortune 500 company.
As such, the mobile phlebotomy industry has emerged in support of these and a variety of other constituencies needing fully outsourced specimen collection solutions. Partnering with an independent, fully outsourced specimen collection organization allows the testing provider to maintain control. They become a direct extension of the testing provider, at a very cost effective price point. Indeed, partnering with an independent specimen collection, processing, and delivery support solution is just plain smart!
While modern phlebotomy and indeed, mobile phlebotomy, has been a common medical practice for decades, its evolution as an industry of its own is recent and still maturing. As has been the story with most new industry sectors, the drive for its development is demand based on need. As the saying goes, “necessity is the mother of all invention.” As such, the field’s existing and developing constituencies have been searching for ways to fulfil their respective need for high-quality phlebotomy, specimen collection and delivery. In response, a variety of creative approaches have emerged resulting in a patchwork of solutions but none that serves all the mobile phlebotomy sector’s constituencies well.
Enter Iggbo, a technology company proposing to solve this labor supply problem for the constituencies of the nascent mobile phlebotomy industry. But before we get into that, let’s learn a little bit about the mobile phlebotomy industry and the broader laboratory industry to which it belongs.
A Niche Field
“Mobile phlebotomy” i.e., mobile and on-site specimen collection, processing, and delivery services, is the very definition of a niche business. Many healthcare consumers, even practitioners, have never heard of mobile phlebotomy, let alone that there exist companies that actually specialize in offering such a service. Furthermore, even the industry’s own core customer base (laboratories) seem to be unfamiliar with the general status of the mobile phlebotomy industry and in particular, the legalities of engaging a mobile phlebotomy service. Therefore, consumer and provider education is a critical component of mobile phlebotomy service delivery.
The mobile phlebotomy industry is a segment of the laboratory testing industry, but it has its roots in the insurance paramedical exam service. The medical and life insurance industry began to boom in the 80s when employers began offering medical and life insurance plans as a standard part of benefits packages. Actuaries of these insurance companies needed to ensure their growing risk exposure was kept in line with their financial capacity. So, insurance companies began requiring medical exams of certain new applicants. The insurance companies started accruing data sets that enabled them to fine tune their product offerings and prices. Wanting to expand on these successes they began expanding the medical exam requirements to even more applicant demographic groups. However, the cost of a full medical exam by a licensed practitioner prohibited ever increasing screening of applicants. So, a shortened version of a medical exam was created, called a paramedical exam, that could be performed by allied healthcare personnel, instead of licensed practitioners. So today many life insurance and medical insurance screening exams (paramedical exams) are conducted by phlebotomists who are simply collecting basic physical data through a few blood samples, height and weight measurements, and blood pressure readings. A cottage industry of paramedical exams services developed to support the insurance industry’s ever increasing practice of evaluating and screening potential customers. The laboratory testing industry saw a new constituent customer in these insurance companies as testing samples became a common part of insurance paramedical exams. In fact, one laboratory, Quest Diagnostics, was so interested in capturing this growing new revenue stream that it created its own wholly owned paramedical exam subsidiary, called Exam One. Demand and competition in the new paramedical exam business became acute. The new industry was challenged by price pressure and demands to scale nationally (the same as the mobile phlebotomy industry is experiencing now). The larger services began to cobble together networks of contract labor through partnerships with local providers, who also struggled to meet the demand at the price points expected. Thus the job of the contract mobile phlebotomist was born, which facilitated rock bottom labor cost and the easiest path to national coverage.
As the life and medical insurance industry has waned in the last decade, these paramedical exams services have failed or consolidated, and desperately began seeking other revenue streams besides the insurance industry, like corporate wellness companies that needed onsite specimen collection support to perform annual employee wellness screenings as a part of a corporate wellness program. This dovetailed into doing specimen collection for specialty medical diagnostic labs who were trying to expand their market reach but didn’t have the brick and mortar presence (a network of patient service center locations) through which to collect samples for lab orders being prescribed by their practitioner clientele. Many of these smaller labs have gleefully and wantonly engaged these insurance paramedical exams services to perform mobile phlebotomy for them, happy to see their market reach expand and revenues soar. In short, everyone began doing it so others assumed the practice must be legitimate and legal.
A Highly Fragmented Market
As it stands, the delivery of ancillary healthcare services is highly fragmented in general, and this is acutely evident in the mobile phlebotomy sector. Still, the demand for such services from a variety of constituencies is strong and growing at an astounding rate. Most of the companies specializing in mobile medical services operate locally and within an urban geographic area, where consumers are far more likely to have the income to afford to pay out-of-pocket for alternative and convenience-based healthcare providers and concierge services.
For this, and a variety of other reasons, at present there are no companies that can provide mobile phlebotomy services on a national scale, who also have an appropriate operating model to provide mobile phlebotomy to all the industry’s constituent customers, specifically medical diagnostics providers.
And yet, the industry’s customers are clamoring for just such a solution. As one potential customer told me, “we need to dispatch a phlebotomist, on demand, within 3 to 5 hours, to any location, anywhere in the country.” I frequently find myself explaining to these potential customers, in diplomatic terms, just because you need it, doesn’t mean it exists. The customer demand is certainly far ahead of the industry’s current capacity.
It is this demand and the corresponding lack of existing solutions that has enticed the insurance paramedical exams services, and others, to venture into offering medical diagnostic specimen collection as well. And many of the industry’s constituents, lacking a full understanding of the structural issues and legalities of mobile phlebotomy, have been all too eager to rush into partnerships with any organization promising a national scale, without much evaluation of the appropriateness and legality of the service model employed.
Financial Realities of the Market
So, why then has the market for mobile phlebotomy not yielded any players that have a national reach and an appropriate service model? Comparable industry statistics suggests multiple reasons why the niche mobile phlebotomy sector has yet to produce an organization with nationwide reach and whose operating model can service all the sector’s constituent groups, while complying with all applicable regulations.
First and foremost, the industry is still very young and there hasn’t really been sufficient time for truly adequate solutions to develop. Next, mobile phlebotomy service is a small margin business. The reasoning behind this is twofold: First, there are regional economic variations in price point expectations for certain medical services. For example, the price point the market will bear for mobile phlebotomy services in the San Francisco Bay Area is very different than the price point in Oklahoma City. Specifically, the market price point for mobile phlebotomy service nationally across all major metro markets has an estimated 300% variance, yet the labor rate variance for phlebotomy technicians is only 67%. This means that in low price point markets, the wage demand leaves very little margin after labor cost.
Second, while the demand for mobile phlebotomy comes from at least ten distinct customer constituency types, this serves as a market strength but a challenge for organizations that offer mobile phlebotomy exclusively or as a part of their suite of services. Culling together enough of this low margin work from these different constituent groups to yield a workable business model is challenging enough but in addition, there are significant regulatory, administrative, and logistical challenges managing the varied needs of each of these distinct constituent groups. For example, managing the administrative and field support needs like scheduling, billing, and client management for individual patients is vastly different than serving a managed care organization like Kaiser Permanente, or a laboratory client like Quest Diagnostics. As a result, many organizations that offer mobile phlebotomy usually just specialize in offering support to one or two different constituent types in just a few concentrated metro markets. However, because most of these organizations take this approach, they struggle to maintain consistent profitability which affects their ability to expand into new markets.
The Business of Mobile Phlebotomy
Within this sector are two types of organizational models: an employed model and a vendor/contractor model.
Organizations that employ the latter model utilize networks of contract technicians, allowing them to claim a relatively large geographic presence and national service capabilities. However, because these organizations utilize contract labor, they cannot exercise direct control and oversight of the technician-contractor’s work by virtue of the technician’s contract status. These specimen collection vendors typically utilize inexperienced technicians who lack practical, real-world experience. This inexperienced, low wage labor is all they can attract because the compensation rates they offer barely meet minimum wage requirements. As a consequence, there is a high degree of turnover, zero institutional memory, and poor customer satisfaction.
Under this vendor/contractor model, the trade-off for offering low price points for mobile phlebotomy support are high turnover rates, poor customer satisfaction, and limited ability to provide services to specific customer constituent groups that need or require tight control and oversight, such as medical diagnostic and research specimen collection regulated by CLIA and certain other stricter state regulations.
Thus, organizations using this model mainly target and offer support services to the insurance and forensics sectors; they simply cannot offer phlebotomy support for any medical diagnostic specimen collection, processing and delivery purpose by virtue of the technician’s contractor status. The fact that some of these organization do attempt to supplement their primary revenue stream by offering phlebotomy support to medical diagnostic laboratories is a violation of the law, contrary to the CLIA mandates and puts the laboratory’s accreditation at risk. The regulatory requirements for any specimen collection for medical diagnostic purposes demands that the performing entity exercise direct control and oversight over the technician labor, i.e., that the technician be an employee of the organization performing the specimen collection, processing and delivery. The regulatory and certifying entities make a very clear distinction between specimen collection for “screening purposes” (like insurance exams) and specimen collection that can be used for medical diagnostic purposes, including CLIA certified laboratories offering direct to consumer testing services.
On the other hand, organizations that actually employ their phlebotomy technicians avoid the disadvantages and arguably unethical practices observed by the vendor/contractor model described above. The employed model allows for direct oversight and control not only of the technician employee but, most significantly, the quality and quantity of work performed by the technician. Under this model, an employer is directly responsible for the work of employee technicians and because of this responsibility, the employer is more likely to invest in the technician’s skill, training and development. This fosters a “team” environment where all employees in the organization, owner, technicians and support staff, each have a vested interest in ensuring that each provide the best service possible to all customers who request mobile phlebotomy and specimen collection services. Also, because of the employee status of the technicians, the organization can service a broader range of customer constituencies, provide a wider range of services and most importantly, comply with all applicable regulatory requirements within a given jurisdiction.
The Regulatory History
As a prerequisite to understanding why it is important consider the labor model as a critical factor in evaluating the mobile phlebotomy industry, it is necessary to review some of the key turning points that steered the course of the commercial lab industry’s development.
On December 5, 1967, the U.S. enacted Public Law 90-174, which included in Section 5 the “Clinical Laboratories Improvement Act of 1967.” CLIA ’67 set regulations on the licensing of clinical laboratories.
By the mid-1980s, however, the relevance of CLIA ’67 to a vastly changed procedural and technological clinical laboratory landscape began to be questioned. In response to public furor about several deaths attributed to false-negative Pap smear readings and a growing awareness among practitioners, regulators, and the general public that there was high variability in laboratory testing, Congress held hearings to investigate. Congressional hearings revealed serious deficiencies in quality among physician office laboratories and in Pap smear testing. The Office of the Assistant Secretary for Health for Planning and Evaluation (ASPE) of the U.S. Department of Health and Human Services commissioned a study to assess the effectiveness of federal regulations affecting clinical laboratories and their goal of protecting the public health. On April 8, 1986, the Final Report on Assessment of Clinical Laboratory Regulations by Michael L. Kenney and Don P. Greenberg was submitted to the ASPE.
The analysis found that many federal regulations were technically obsolete and operationally and functionally ineffective. These ineffective regulations had resulted in a growing variability in laboratory testing practices and pervasive incompetence in their performance that had, in some cases, caused harm and even death.
On August 5, 1988, a new set of proposed regulations were put forth by the Health Care Financing Administration (now CMS) as Medicare, Medicaid and CLIA Programs; Revision of the Clinical Laboratory Regulations for the Medicare, Medicaid, and Clinical Laboratories Improvement Act of 1967 Programs. This ultimately led to the proposal becoming law on October 31, 1988 under Public Law 100-578 as the Clinical Laboratory Improvement Amendments of 1988 (CLIA ’88).
Prior to 1988, less than 10% of all clinical laboratories were required to meet quality standards. Approximately 12,000 hospitals and independent laboratories were regulated under the Clinical Laboratory Improvement Act of 1967 (CLIA ’67) and the Medicare and Medicaid programs. Currently, under the Clinical Laboratory Improvement Amendments of 1988 (CLIA ’88), all 150,000 clinical laboratories, including physician office laboratories, are regulated to ensure the quality of test results.
In the years since implementation, studies have demonstrated that laboratories meeting minimum personnel and quality requirements perform better than those that do not. The CLIA ’88 law is now a bedrock standard providing assurance to the public that access to safe, accurate laboratory testing is available.
CLIA and Phlebotomy
Even after CLIA passed and was fully implemented, phlebotomy as a procedure remained a relatively unregulated practice. Because, for many decades prior, it was mostly performed by doctors and nurses until the development and growth of the commercial laboratory testing industry. Phlebotomy then started to become the purview of the commercial laboratory employer who needed low cost labor to perform high volume specimen collection (phlebotomy). These “specimen collectors” were mostly given on the job training.
It wasn’t until 1998, 10 years after CLIA, passed when a phlebotomist in California was caught reusing butterfly needles that regulators enacted training and certification requirements for phlebotomists. Yes, people sometimes do bad things when they don’t have adequate training and when they know no one is watching – even healthcare providers. So, curricula and training programs were developed nearly overnight and fueled a small boom in allied healthcare career training schools offering phlebotomy training. Soon after, allied healthcare certifying organizations began adding phlebotomy certification to their offerings. Large corporate healthcare employers then began requiring their phlebotomists to be certified by a certifying agency.
Over the last few decades, the laboratory industry has become more regulated, the number of clinical laboratories has declined through attrition and consolidation, and the labor pool used in laboratory sciences has changed dramatically in scope of practice and specialty and has shrunk as training requirements and certification requirements were imposed by regulations, and more recently, as it relates to phlebotomy.
Iggbo & The Contract Phlebotomist
Against this backdrop enters Iggbo, proposing to solve this labor supply problem for the constituencies of the nascent mobile phlebotomy industry by applying the “Uber model”, leveraging technology to provide customers on demand access to a flexible, scalable, lowest cost labor force ready and willing to provide the service desired – the new “sharing economy” meets healthcare delivery.
Allison Griswald of Quartz.com is a journalist who follows trends in the “sharing economy”. Interested in Iggbo’s attempt to apply the Uber model to laboratory specimen collection services, she interviewed Iggbo’s CEO, Nuno Valentine. In her article on Quartz.com she writes,
“Like Uber, Iggbo is building its business on independent contractors, which is how it hires phlebotomists. The sales pitch to phlebotomists on Iggbo’s website includes “be your own boss” and “build your own future”. Contractors work when they want and are paid, on average, around $20 for each blood draw.”
In this article Mr. Valentine is quoted as saying, “We are a technology company, and provide deal flow and processes and so forth for the labor force.” Ms. Griswald writes,
“This is also very much like Uber, which as you recall is a technology company, not a taxi company. What a lot of these companies tend to realize too late is that the Uber model doesn’t really fit for them. Sometimes that’s because the service they’re selling is complicated (more so than driving a car), but they can’t really train workers who are contractors, as that’s typically considered indicative of an employer-employee relationship.” “Iggbo will probably realize this too, sooner or later.”
Ms. Griswald raises a very good point. And the question is more than worth exploring.
Iggbo, Laboratories & The Current Regulations
What are the relevant regulations regarding mobile phlebotomy? Does Iggbo’s use of contract phlebotomists comply with these regulations? Can a laboratory even outsource phlebotomy (or for that matter any other workflow)? It is CLIA regulations and a host of other state regulations that provide the answers to these and other very important relevant questions regarding Iggbo.
The U.S. Code Title 42 (42USC), section 263a and The Code of Federal Regulations title 42 (42CFR), part 493 codify and implement The Clinical Laboratory Improvement Amendments (CLIA88). The Centers for Medicaid and Medicare Services (CMS), formerly the Healthcare Financing Administration (HCFA), is in part responsible for the administration and enforcement of this law and its ensuing regulations. In addition, various states have implemented additional laws and regulations governing laboratories, laboratory personnel, and phlebotomy specifically.
First, let’s establish that the phlebotomist need not be employed by the lab directly. CA DHS Laboratory Field Services guidance on interpretation of the California BPC 1246 and CCR 1034, state that the phlebotomists may work outside of a lab and that the W2 need not originate from the lab (not that the phlebotomist can be an independent contractor, just that they don’t have to be an employee of the lab directly). Furthermore, CLIA regulations allow labs to “outsource” labor.
However, all of the relevant regulations state explicitly that regardless whether the lab directly employs the labor or outsources it to another entity who employs the labor, the entity must have the same oversight and compliance structures prescribed by law for labs certified under CLIA. There is no other organizational structure under which a phlebotomist can be employed to perform medical diagnostic specimen collection. Basically it’s either a lab, a “pseudo-lab” (like mobile phlebotomy companies), or a licensed medical provider (like a doctor or medical group), that can employ phlebotomists to perform specimen collection for medical diagnostic testing.
There are a lot of reasons for this, but basically it boils down to the fact that the lab (the organization with the CLIA license under which the results are reported), per strict and explicit CLIA regulations, IS ultimately held responsible for the outcome, regardless of who employs the phlebotomist. It is the lab who accepted the specimen for testing. By virtue of accepting that specimen for testing, they are in essence “vouching” for that specimen’s integrity – that it was properly collected, labeled, processed and handled.
Section 493.1407(b) states that, “If the laboratory director reapportions performance of his or her responsibilities, he or she remains responsible for ensuring that all duties are properly performed.” So, while it is permissible for the lab director to “reapportion” or outsource some of the laboratory’s duties, it is ultimately still responsible for ensuring the delegated entity or individual(s) perform as prescribed by law.
Further emphasizing this point is section 493.1407(c) which states, “The laboratory director must be accessible to the laboratory [meaning all personnel involved in the testing processes] to provide onsite, telephone or electronic consultation as needed.” This requirement even extends to the laboratory’s clients.
But, Iggbo’s compliance with 493.1407(c) is questionable at best. It would appear that Iggbo is not concerned with ensuring compliance with 493.1407(c). Based on the information posted on Iggbo’s site for phlebotomists, they’re support hours for phlebotomists are limited to 8am to 6pm EST. But according to this regulation, access to supervision and direction must be made available whenever laboratory personnel are working. What happens when a phlebotomist working in the pacific time zone needs technical direction at 3:30pm PST/6:30pm EST?
Section 493.1407 (e)1, (e)3i, and (e)3iii further emphasize that it is the laboratory’s responsibility to ensure that the personnel and systems used, even in the preanalytic phase, provide the highest quality test result. In essence, these regulations state that because it is the laboratory reporting the test result it is ultimately the lab’s responsibility to ensure that the sample(s) they accept for testing have absolute integrity, regardless of who collects the sample, by specifically ensuring that all personnel involved in the “test procedures”, from sample collection to result reporting, are compliant with all applicable regulations. This means that they must ensure all personnel who come in contact with specimens they test are competent and comply “with all applicable regulations”, and this includes the pre-analytic phase.
To put an even finer point on this matter, in the State Operating Manual Appendix C, issued to states to provide more specific interpretive guidelines on the implementation of the regulations, CMS states in section D6004, “The requirement that a laboratory must be under the direction of a qualified person is not automatically met simply because the director meets the education and experience requirements. It must be demonstrated that the individual is, in fact, providing effective direction over the operation of the laboratory. In determining whether the director responsibilities are met, consider deficiencies found in other conditions, e.g., facility administration, general laboratory systems, preanalytic systems, analytic systems, post-analytic systems, and proficiency testing.”
In fact, the meaning and intent of some of these regulations have been adjudicated through administrative hearings. In 1999, Oakland Medical Group, P.C. had its CLIA license revoked by the HCFA (now CMS) for several reasons, but in part for failure to provide the requisite oversight and direction of personnel responsible for laboratory processes on specimens it tested. In its appeal to the Department of Health and Human Services Appellate Division Appeals Board, Oakland Medical Group attempted to argue it was not in material breach of the regulation because the CLIA regulations refer to the requirement to control “employees” of the laboratory and the personnel in question was a contractor. The administrative law judge ruled that the employment status of individuals authorized by the laboratory is immaterial as 42CRF 493.1445 specifically provides that delegation of duties and responsibilities of the laboratory does not relieve the laboratory of the responsibility for their proper performance.
As noted already, CLIA regulations even require laboratories to provide technical direction, instruction, and assistance to the laboratory’s own clients who might collect their own patients’ specimens and then submit them to the laboratory for testing. The regulations were clearly written with the assumption and implication that the preanalytical phase would be performed by trained personnel under the laboratory’s control or by the laboratory’s clients – who are assumed to be competent to perform or oversee the performance of procedures outlined by the laboratory for collection, processing and handling of specimens intended for the lab to test – medically licensed personnel. And while phlebotomists can now be certified, certification is not a medical license, and certification is certainly not a substitute for proper training, oversight, and direction. Because there are, as yet no national standards – no national licensing standards for phlebotomists, it is wholly inappropriate to rely on certification as evidence of a phlebotomist’s capacity to be self-governing – autonomous, as if they were licensed practitioners like nurses and doctors.
So, the question becomes, from whom should the laboratory accept specimens for testing if the laboratory is ultimately to be made responsible for the outcome? Arguably, any straight forward reading of the regulations means that who is “authorized” and “under the laboratory’s control” is anyone from whom the lab accepts a specimen for testing – by default, whether intended or not. At minimum, prudence would dictate then that, the lab should only allow for specimens to be collected by and accepted from either 1) the lab’s own clients (medically licensed practitioners authorized to prescribe testing), or 2) personnel determined by the laboratory to be appropriate, trained, competent, and monitored by the specific required oversight architecture prescribed by CLIA for any personnel involved in the testing process of specimens accepted by the laboratory.
In simplest terms, the lab is permitted to outsource but the outsourcing must still meet the same regulatory requirements the lab is required to adhere to because the lab will still be held responsible for the outcome. Meaning that anyone the lab hires to perform any part of the testing process (phlebotomy included) is required have the exact same CLIA prescribed oversight structure, to assure the integrity of all specimens the lab accepts.
Next, some of the laboratory’s most overarching obligations as prescribed by these regulations are embodied within the obligations and duties of the laboratory director. For example, 42CFR 493.1407 specifies that the laboratory director’s responsibility is to ensure “…the employment of personnel competent to perform test procedures [this includes phlebotomy], …and for ensuring compliance with the applicable regulations.” (13) Ensure that an approved procedure manual is available to all personnel responsible for any aspect of the testing process; and (14) Specify, in writing, the responsibilities and duties of each consultant and each person, engaged in the performance of the preanalytic, …phases of testing.”
Since Iggbo is not the laboratory, it is important to know if Iggbo provides oversight by a laboratory director, as required by law. Or do they expect their laboratory clients’ lab directors to provide Iggbo phlebotomists with the required oversight? If the later, are their contractor phlebotomists supposed to be taking training, oversight and direction from each and every laboratory client separately; does each phlebotomist have as many “bosses” as Iggbo has lab clients? From the information on Iggbo’s site, it allows labs to make the decision with regard to if and how much “training” and oversight the client lab exerts over phlebotomists it “authorizes” to perform sample collection for them through Iggbo.
So, while some labs may require some training, others may not require any. This would potentially mean that labs that required training – those that are exerting some measure of control over the phlebotomist, could be exposed to legal liability for the performance of work the phlebotomist does for other labs that exert no control. Regardless what the truth is about Iggbo’s “authorization” scheme, phlebotomists performing specimen collection for a medical lab, must have ongoing, active supervision by someone qualified to be a CLIA licensed laboratory director.
Subsection (e)(12) requires the laboratory to do the following, “Ensure that policies and procedures are established for monitoring individuals who conduct preanalytical… phases of testing to assure that they are competent and maintain their competency;
Does Iggbo or do Iggbo client labs have a compliance monitoring program to provide ongoing proactive monitoring of Iggbo contractor phlebotomists?
So, then what would a compliant organizational structure for a mobile phlebotomy company look like? In separate legal opinions written to provide certain mobile phlebotomy companies guidance on the proper formation and operation of a phlebotomy service, attorneys Kevin Keener and Anaheeta Kohla, having reviewed all applicable laws and regulations, outline the specific applications of law and succinctly summarize the regulatory obligations a mobile phlebotomy company bears:[Kevin Keener, JD]
“The corporation’s structure and performance of phlebotomy must meet the requirements and guidelines established under law.
Specifically and most importantly, the corporation must have implemented the proper review of its technicians through the hiring of a medical director qualified per the applicable regulations. The “general supervision” requirements of technicians are specified by CBP Section 1246 (c)(2)(B). The supervision requirements are also mirrored in 17 CCR § 1034(b)(2)(B) and (C). These provisions require the medical director to ensure that the technicians are competent to perform draws initially and at least annually thereafter. The supervisor must also review the work of each technician on a monthly basis. The corporation must have hired a medical director to oversee the performance of these tasks in order to be in compliance with the supervision requirements of the law.
The supervisor must be available to where the technician is working to provide a consultation either in person, via telephone, or via electronic means within thirty minutes. See CBP Code Section 1246(c)(2)(B). Only this structure, whereby the medical director [or their qualified designate] is available to a technician either in person, via telephone, or via electronic means within thirty minutes is thus in compliance with the law.”[Anaheta Kohla, JD];
“Pursuant to CLIA’s pre-analytic systems, §§493.1240-1249, Corporation’s conducting only pre-analytic systems of specimen collection, transport and processing are regulated by CLIA. In performing this function, the Corporation must have verifiable written/electronic policies and procedures as prescribed by CLIA of any diagnostic laboratory.
Further, the Corporation must have a compliance system in place for any test request that documents the patient’s name/unique identifier, sex and age or date of birth, the test(s) to be performed, the source of the specimen, the date and time of specimen collection, all additional information that is relevant and necessary for a specific test to make sure that accuracy and timely testing are met for the reporting of results by the receiving laboratory.
Also, pursuant to CLIA §493.1249, the Corporation must assist its contracting laboratories to remain in compliance themselves, because the Corporation has an obligation under law to have written policies and procedures for monitoring, assessing and (if warranted) correcting identified problems in the pre-analytic system. The Corporation must conduct its own assessment procedures by reviewing the effectiveness of corrective actions in order to resolve problems, to revise policies and procedures continuously and systematically, to achieve legal and ethical standards, to prevent new problems and to report all findings to the contracting laboratories.
Moreover, corporations operating in states like California are subject to regulations such as 17 CCR 1034, California Business and Professions Code §1209 and §1246, California Health and Safety Code §§120580, 120900-120920, and California Civil Jury Instructions (CACI) 600, the Corporation must be in compliance with the required phlebotomists’ certification, training, and education, and with oversight by a contracted Medical Director(s) for the maintenance of the legal standard of care while drawing blood or collecting specimens from patients for delivery to the contracting laboratory.”
“Concurrently, the Corporation and contracting laboratories must have open lines of communication in which they facilitate the transfer of vital information for the compliance of the ancillary phlebotomy service; the Corporation must be able to demonstrate the successful implementation of its delegated authority to achieve said compliance.
Further, the Corporation must conduct a diligent application of quality control to monitor their phlebotomists’ education, training, licensing, accreditation, professional continuing education, patient interaction and communication skills training and legal standard of care education, to fully demonstrate that the Corporation is proficient at taking on delegated authority by the contracting laboratory to ensure compliance of its phlebotomy and specimen delivery service.”
Fundamentally, the regulations relevant to phlebotomy are implicit in all regulations related to the laboratory’s responsibility to have, monitor, and maintain specific personnel, procedures and systems to ensure the integrity and accuracy of the specimen and its collection, processing, transport, testing, and results reporting. If the lab outsources the pre-analytical process, it also outsources the compliance structure required by CLIA of the pre-analytical systems.
The bottom line is this, although 42CFR – CLIA Amendments don’t prohibit the use of contract phlebotomists in explicit terms, they do prohibit the use of contract phlebotomists by virtue of the type and extent of oversight and control required to be compliant with the law. In short, CLIA oversight requirements cannot be fulfilled through a contractor relationship, as is defined by the IRS.
Iggbo vs. CLIA & the IRS
Let’s briefly review who the IRS considers “a contractor”. As taken directly from the IRS website:
“The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed.”
There are three types of evaluations that can and should be done to evaluate if an individual is an employee or a contractor: the common law test, the economic reality test, and the reasonable basis test.
The Common Law Test
The IRS uses a 20 factor test to determine if labor is classified as an employee or a contractor. This is referred to as the “Common Law Test”. The IRS common law test factors that specifically apply to Iggbo’s use of contractor phlebotomists are listed below:
• Level of instruction: If the company directs when, where, and how work is done, this control indicates a possible employment relationship.
As evidenced by statements obtained from the Iggbo website, Iggbo and/or Iggbo client labs are clearly providing a level of “instruction” and direction characteristic of an employment relationship. And if they aren’t, they should be, because that is the nature of the oversight compliance required by CLIA.
• Amount of training: Requesting workers to undergo company-provided training suggests an employment relationship since the company is directing the methods by which work is accomplished.
Again, according to statements made by Iggbo representatives and information on Iggbo’s website, Iggbo and Iggbo client labs both require specific training as a prerequisite to any work assignments.
• Degree of business integration: Workers whose services are integrated into business operations or significantly affect business success are likely to be considered employees.
Remember that the workflow in laboratory services are divided into three phases: pre-analytical, analytical, and post-analytical. Iggbo, sells labs the labor to perform the pre-analytical process. That work, is absolutely integral – it is key to the operation and success of the laboratory’s business.
• Extent of personal services: Companies that insist on a particular person performing the work assert a degree of control that suggests an employment relationship. In contrast, independent contractors typically are free to assign work to anyone.
Iggbo client labs engage specific phlebotomists to perform their specimen collection services by authorizing certain phlebotomists and not others. Furthermore, Iggbo permits their lab clients to set what they call “preferences” so that assignments will only go to certain pre-selected phlebotomists.
• Continuity of relationship: A continuous relationship between a company and a worker indicates a possible employment relationship.
Through this screening, selection and rating system, Iggbo and Iggbo client labs develop a dedicated workforce of phlebotomists working exclusively through Iggbo for Iggbo client labs. It is very clear that a long term, on going relationship is established between Iggbo lab clients and the phlebotomists performing their specimen collection. And we might argue this is exactly what you want in this type of work. You want a dedicated workforce where churn and turnover are kept to a bare minimum so that the personnel develop expertise and builds institutional memory.
• Sequence of work: If a company requires work to be performed in specific order or sequence, this control suggests an employment relationship.
The very nature of laboratory work requires a specific sequence in the performance of the work. Furthermore, laboratories often have specimen collection, processing and handling requirements that are developed as a part of a protocol unique to that labs performance of certain types of testing.
• Provision of tools and materials: Workers who perform most of their work using company-provided equipment, tools, and materials are more likely to be considered employees.
Although Iggbo states that their phlebotomists are responsible for procuring and maintaining a centrifuge and phlebotomy supplies, this is contrary to CLIA regulations and accepted standards. The laboratory must have and maintain specific protocols with regard to all equipment and supplies used in the performance of specimen collection for any test on their test menu. The equipment must be regularly tested and maintained and the testing and maintenance recorded in a log. The supplies have storage and use requirements as well as expiration dates. The lab must have evidence that the supplies were stored and used properly and a procedure to ensure that expired supplies aren’t used in the performance of specimen collection for any test. For this reason, many lab clients provide the phlebotomist equipment and supplies – and this creates an employment relationship.
• Availability to public: If a worker regularly makes services available to the general public, this supports an independent contractor determination.
As we have noted previously, phlebotomists are not licensed medical providers. They cannot offer phlebotomy directly to the public in the same way a physician can offer medical care.
• Control over discharge: A company’s unilateral right to discharge a worker suggests an employment relationship. In contrast, a company’s ability to terminate independent contractor relationships generally depends on contract terms.
Iggbo does not allow phlebotomists to negotiate any terms of their contract. The terms that Iggbo requires are very one sided by permitting Iggbo to take overarching unilateral actions without any recourse to the phlebotomist.
• Right of termination: Most employees unilaterally can terminate their work for a company without liability. Independent contractors cannot terminate services without liability, except as allowed under their contracts.
The Iggbo phlebotomist contract also provides for unilateral termination without liability for both parties – which is essentially the characteristic of an employment relationship.
Economic Reality Test
Court decisions interpreting FLSA coverage rules require that employers use an economic reality test in determining whether an employment relationship exists with respect to a given worker. Similar to the common law test, the economic reality test focuses on the degree of control exercised by the employer as an essential factor in determining whether an employer-employee relationship exists.
Reasonable Basis Test
While the common law test looks at the nature of the working relationship, the reasonable basis test is based on how the courts and the IRS have classified similar workers in the company or the industry in the past. The reasonable basis test is considered a “safe harbor.” That is, if you can show you had a reasonable basis for treating a worker as an independent contractor, you may not be penalized for doing so. For example, a court ruling in favor of treating workers in similar circumstances as non-employees, or a longstanding, widely recognized practice in an industry of treating similar workers as independent contractors.
In fact, the reasonable basis test provides evidence contrary to any industry support for the use of contract phlebotomists. Even Quest Diagnostics subsidiary, Exam One, recently began to abandon its use of contractor phlebotomists for staffing corporate wellness events among other types of work.
Iggbo Phlebotomists – Contractor or Employee?
The Laboratory – Iggbo – Phlebotomist relationship fail significant components of all of these tests.
Mr. Valentine asserts that Iggbo provides phlebotomists instructions and monitors performance. But as Ms. Griswald writes, these policies,
“…could be viewed as employer like, and threaten its independent contractor model. Again, whether or not a company provides training for their workers is viewed as an important test of whether those workers are “employees.”
Mr. Valentine’s response is telling… again, Ms. Griswald writes,
“Valentine says Iggbo doesn’t provide …training”, but it does provide “information” to workers on how to draw, package, and send blood tests to labs.”
However, on Iggbo’s website “training” was referenced several times in relation to phlebotomists and compliance.
So was Iggbo claiming to provide just “information” or was it “training” its phlebotomists? More importantly, is either sufficient to be compliant with all applicable laws and regulations relevant to the pre-analytical process? It would appear that Iggbo was desperately attempting to thread the needle on both compliance with the CLIA regulations and compliance with IRS labor classification rules. Claiming to provide enough training and oversight to be compliant, but not too much so as to run afoul of the IRS rules on employment classification? To me this sounds all too much like wanting your cake and eating it too. It’s like talking out of both sides of your mouth while trying not to appear duplicitous.
By having labs “authorize” each technician, with an option to provide the technician with one time “training” and/or “documents”, it would seem they are trying to absolve themselves of compliance responsibility. But this still begs the question, is this initial “training” or transmittal of some policy document sufficient to comply with the requirements of ongoing oversight and direction? Furthermore, does this conflict with the contractor status of the technician – would it be considered an employer-employee relationship being established? So my fundamental point is still valid, that they can’t have it both ways. They (and/or their lab clients, more precisely) cannot claim to fully comply with contract phlebotomist labor. Either they are providing full compliance – which necessitates an employer-employee relationship OR they have contractors and therefore are not providing complete oversight and direction.
Iggbo was stating the phlebotomist is responsible for compliance, but the law says the lab is responsible. Iggbo does have to frame it this way because to say otherwise would clearly require an employer-employee relationship.
The fact of the matter is that to be fully compliant with CLIA and other state laws is plainly incompatible with the very characteristics that make a contractor, a contractor.
Iggbo & HIPAA
Iggbo exercised zero control over the use, handling and retention of legally protect personal health information handled by their phlebotomists. Iggbo instructed phlebotomists to “retain records” but apparently provided no method for securing protected health information and no guidance, policies and procedures to ensure its contractor technicians were compliant with HIPAA. And yet, it is the laboratory who will be held responsible for any security breach and unauthorized release of personal health information. Most phlebotomy technicians are ignorant of the complexities involved in compliance with HIPAA and the HIPAA HITECH security laws. It is incredulous that Iggbo would treat HIPAA compliance so casually as to foist off HIPAA compliance responsibility to low wage technician level labor.
Iggbo & OSHA
OSHA standard 1910.1030 regulates the prevention of exposure to blood borne pathogens such has Human Immunodeficiency Virus (HIV), Hepatitis B Virus (HBV) and Hepatitis C Virus (HCV). OSHA requires an organization engaging in any business activity where there is potential for exposure to blood borne pathogens, hazardous chemicals or any other injury risk to provide certain work practice controls to ensure worker and public safety and health. Organizations should demonstrate commitment to ensuring the safety of their employees by providing training on blood borne pathogen exposure prevention as well as the provision of equipment that will assist in the prevention of Blood Bone Pathogen Exposure. There is a very high risk of exposure to blood home pathogens in laboratory services, especially phlebotomy. The incidence of needle stick injury and blood borne pathogen exposure in laboratory services is ??? As such, universal precautions must be practiced by all laboratory personnel. This means treating all specimens as potentially infectious. All supervisors and management staff are responsible for ensuring that all personnel are complying with universal precautions and that employees not following universal precautions are subject to disciplinary action. Needle-sticks are a real concern for all people performing phlebotomy. Utilizing proper technique and physical work place controls such as needles with safety devices helps to avoid these occurrences. However, since Iggbo uses a contactor model of employment, they do not provide any such support, guidance, training, oversight, supervision and monitoring of adherence to the OSHA standards and regulations. If a needle-stick occurs to either the patient or the phlebotomist, there is no one to contact, no one taking responsibility, no support or guidance for either the phlebotomist or the patient. There is no company paid medical provider to evaluate and treat the possible exposure. This is not just a workplace hazard to contract technicians, this is a public health and safety risk without any remediation provided by Iggbo.
All healthcare provider organizations are required to have an Infection Control Policy to ensure technician safety and protect public health. Iggbo has no procedures to prevent and minimize public health risks – the spread of disease, etc. when a technician is entering many different homes of individuals who may be infirmed, have weakened immune systems, etc.
In addition, biohazardous materials waste (the used needles and bloody gauze, etc.) must be disposed of properly as required by regulations. The waste materials generated from phlebotomy must be disposed of through a licensed medical waste disposal company. Those companies typically contract with medical provider organizations and licensed medical personnel, not individual phlebotomists. Iggbo does not provide medical waste disposal contracts for its phlebotomists, and state on the Iggbo website that phlebotomists are responsible for medical waste disposal. This is contrary to the regulations and accepted standards of practice, and presents yet another risk to public health and safety as it is highly likely that this medical waste is not being disposed of correctly.
Furthermore, The Federal Transportation Safety Administration also has regulations governing the handling and transport of any biohazardous or potentially infectious material. These are:
- The Hazardous Materials Transportation Act of 1975 (HMTA), 49 CFR Parts, 101, 106-107, and 171-180.
- HMTA, section 112, 40 U.S.C. 1811 preempts state and local government requirements that are inconsistent with the statute, unless that requirement affords equal or greater levels of protection to the public than the HMTA requirement.
- The Hazardous Materials Transportation Uniform Safety Act of 1990 (HMTUSA) (intrastate, interstate and foreign commerce, 55 FR 52402).
Iggbo provides no training or guidance, no supervision or monitoring to ensure compliance with these laws and regulations.
Lastly, Iggbo contractor phlebotomists are bearing the burden of the financial risk of injury. Because Iggbo phlebotomists are contractors, not employees, they are provided no workers compensation protections.
Iggbo used contractors for medical diagnostic specimen collection. Contract relationships of laboratory to individual phlebotomist do not meet the CLIA oversight compliance requirements. The employment relationships created by Iggbo were not contractor relationships by the IRS definition. Iggbo had no control over HIPPA protected personal health information used by the contractor phlebotomists in the field. And Iggbo provides no OSHA compliance to protect the safety of its workers or to protect the public health. Ergo, their model was non-compliant and therefore illegal.
Iggbo may have been a new company, but the concept is not new and its operating model is based on one that has already been tried in the lab industry and consistently fails to meet customer expectations, let alone satisfy regulatory requirements. The concept of Iggbo is even more egregious than paramedical exam companies using contract labor to perform medical diagnostic sample collection because Iggbo doesn’t even claim to have any vested interest in the labor performing the draw. Per their own testimony, they were only a technology company facilitating “deal flow” between labs and independent contract phlebotomists. This is not by any measure an acceptable model for the performance of laboratory processes. This is the kind of wild west, outlaw dynamic the CLIA law and its regulations were intended to prevent.
The Uber model may be able to quickly solve a labor supply problem, but that does not mean it’s best applied to all scenarios where such challenges exist. If ever there was a case study demonstrating this fact, it is Iggbo utilizing “contract labor” to perform highly regulated, high risk, medical diagnostic specimen collection, processing, and delivery services.
Laboratories utilizing Iggbo style services, whether offered by Get Labs, or any other similar service, should be aware they are putting their licensing in grave jeopardy. Let me state it clearly, laboratory directors will be held liable for any and all actions of phlebotomists utilized through these vendor-contractor service models. If your lab is going to be held responsible, wouldn’t you rather have the assurance that the labor performing your processes are employees of a company exercising direct control and oversight?
The laboratory testing industry tends to focus on control of the testing phase, and much of the emphasis of the regulations is indeed centered on controlling the testing, but we would be remiss to forget that a properly controlled pre-analytical process is prerequisite to a valid test result.
Consider the following, the greatest number of errors in laboratory testing occur in the pre-analytic phase. And the greatest number of complaints received by CMS and from the CA DHS LFS Division are related to independent mobile phlebotomists performing uncontrolled and unsupervised phlebotomy as contractors.
As such, many states are now implementing more rigorous regulations governing laboratory testing and laboratory personnel. California, New York, and others now explicitly prohibit phlebotomists from working independently to perform medical diagnostic sample collection. As an example, The California Department of Health, Laboratory Field Services Division enforces the state laboratory laws, CA BPC 1246 and CCR Title 17, section 1034. These regulations require medical diagnostic specimens to be collected by phlebotomists that are specifically employed by an entity that provides, among other things, training, oversight, and direction. The same training, oversight, and direction as required by laboratories for their own personnel. And so, many states have now codified in explicit terms what CLIA clearly implies with regard to the outsourcing of labor and the use of contract phlebotomy technicians.
But even where states don’t prescribe specific rules or regulations on phlebotomist training, certification, and scope of practice, they of course must still adhere to the explicit and implicit mandates imposed by CLIA. The primary purpose of which, as we all know, is to ensure that the diagnostic data that is used to make life and death decisions is as close to error free as humanly and technically possible. And yet, still, errors in laboratory testing occur and the industry seems to have a penchant for circumventing the law to achieve financial gains. For this reason, the trend in laboratory medicine has been toward more controls and regulation, not less, as many states have done already.
Healthcare, The Contractor & The Sharing Economy
Look, even if it were legal, we need to ask ourselves, is it smart? Is this good healthcare? What does “the sharing economy” have to offer healthcare?
A recent study and report by PBS provides some very useful insights into the dynamics at play in this new “sharing economy” model.
“Imagine that you made $20,000 last year. In addition, you experienced high income variability in which one week you earned $60 and, another week, you received $800. To add to this complexity, imagine that your taxes were not automatically withdrawn from each paycheck. Instead, you were responsible for calculating the amount you owe in taxes and paying those taxes on a quarterly basis.
“1) Close to two-thirds of contractors are contracting as a side gig. Only 36 percent are full-time independent contractors.
The vast majority of independent contractors are contracting on a part-time basis. Over 64 percent were either full-time or part-time employees, students or retired employees. This finding runs counter to the common assumption that most contractors rely solely on their contracting income.”
2) Most contractors are just starting out. “In our study, over 72 percent of workers were contracting for one year or less. Not only are these new contractors forced to learn how to master a new skill, they are also thrusted into a complex tax environment with relatively little experience.”
“3) Being an independent contractor often means variable pay.
The median income for full-time contractors in 2015 was $20,000 — below the median personal income of $28,851. For those contracting part time, the median contracting income was just $7,000. Our survey participants experienced a 10 times differential between their largest paycheck and their smallest paycheck in 2015, suggesting large income variability throughout the year.
Would you be able to actively manage all of your expenses? Would you be able to properly save? For most of us, the answer is no.
This is the challenging reality for most independent contractors. In the last decade, independent contracting accounted for almost all net U.S. job growth. Yet, the research community knows very little about the financial lives of these independent contractors.”
So, now imagine these are the individuals providing you healthcare. Would you be a little hesitant, even a little afraid?
We have seen too many examples of the consequences of unregulated markets engaged in high risk activities. We have seen the result of entities and individuals attempting to thwart regulations or push the boundaries of acceptable practices. Just recently a laboratory company called Theranos drew the attention of regulators, and received fierce criticism from its peers in the lab industry when it was caught utilizing questionable testing practices. The point being that the industry and its regulators do not take kindly to secrecy and risky behavior. And rightly so, we are literally dealing with peoples’ lives. This should be a clarion call – a cautionary tale to the industry, if a tech company comes alone promising “disruptive change” and “revolution”, be skeptical!
While I certainly understand that for profit businesses have a need to maximize revenue and minimize costs, we must recognize that this instinct will always be in conflict with core tenets of good healthcare, transparency and best practices. And in the science of laboratory medicine in particular, there is no place for practices that “pretend” to be good patient care, like children “playing doctor”, just because it makes for good profits.
Iggbo was desperately trying to thread the needle on these regulations in order to force the creation of a model of healthcare delivery that maximizes profit at the cost of worker and public health and safety – fortunately they failed at the attempt. But now Get Labs is trying it all over again. These laws and regulations were developed to improve patient care and protect public health and safety, because people got hurt and died as a direct result of uncontrolled, non-standardized healthcare practices.
The Solution – A Practical and Legal Framework
So what is the solution then? What would a practical and legal framework for meeting the industry’s constituent needs look like?
Organizations looking to engage in the performance of mobile phlebotomy ought to establish themselves in the niche mobile phlebotomy and specimen collection market by building an organization with a fierce dedication to quality, dependable services, built on the best practices of the more experienced broader laboratory industry.
Doing so will attract a wide-range of customer constituencies yearning for freedom from the constraints of the laboratory industry’s brick and mortar bond holders. Doing so will establish a brand identity with a reputation for providing superior service and will attract a stable contractual service clientele including large institutional clients.
Doing so will facilitate diagnostic care by providing practitioners and their patients with a link to medical diagnostic and research testing providers by helping laboratories, practitioners and patients successfully overcome the structural barriers to diagnostic utilization wherever and whenever they exist.
I firmly believe that the industry needs a new model for delivery of diagnostic care. But we must do so carefully, with deliberation and attention to best practices that first and foremost result in reliable and effective patient centered care.
The laboratory industry needs to develop partnerships with exceptional providers to provide in-home and in-office specimen collection support solutions. Demonstrating our commitment to partnerships that emphasize and enhance the delivery of patient centered care, produces good will among practitioners and patients in the communities we serve, and shows your organization to be at the forefront of a customer service culture in healthcare, as well as a leader and innovator in diagnostics.
There’s lots of small “mom & pop” mobile phlebotomy shops all over the country with years of experience and dedicated to their customers. Sure, on their own, these are not venture worthy partners. However, if they’re part of a larger organization that can provide them support, oversight, compliance, training, and logistics, then they might be made ready for prime time. One of the organizations that is beginning to do this is The National Phlebotomy Provider Network, an industry organization that provides an infrastructure for compliance, oversight, training, logistics and other support to its members. Its evidence that there are responsible members of the industry, and that it is trying to begin establishing standards and best practices on which an orderly consolidation can occur, that is both beneficial to the industry players, acceptable to risk averse clients and industry regulators, and safe for patient’s.
Because this is a very young industry and as such it is still highly fragmented, consolidation is inevitable, and an organization with national scale is only a matter of time. The same thing happened with the home healthcare industry on the late 90s. There was a proliferation of small boutique home health agencies and they eventually got gobbled up by corporations that consolidated the industry. The same thing will happen to mobile phlebotomy, but I’d put my bets on those companies that are demonstrating leadership and innovation in this sector, not just any contractor or fly by night tech company trying to cash in on a boom, willing to make big promises and tell you what you want to hear.
References & Citations
CMS State Operations Manual
CDC CLIA Chronology
PBS News Article
Lims Wiki – CLIA History