LabCorp, which began in a basement in 1969, “Is living proof of home grown innovation,” David King, CEO and chair of the Burlington-based company told the NC CEO Forum Healthcare Summit earlier this week. The healthcare challenges in the state and the nation are likely to require continuing innovation, he said.
LabCorp (NYSE:LH) had $9.5 billion in revenue in 2016 and employs more than 52,000 people in 60 countries. It processes 100 million lab tests a year, 80 percent of the specimens processed in North Carolina. It has been named to Forbes list of most innovative companies. “We bring an enormous amount of value for what we do,” King said. “Labs represent 3 percent of the healthcare spend but drive 70 percent of healthcare decisions.” Yet, he said, “The government is going to cut our fees by 30 percent unless the legislature intervenes.”
“Big companies fail,” King said, shifting gears, “because they become relentlessly focused on doing what they did yesterday better. To succeed, you need to think ab out what your going to do tomorrow.”
King, who has led LabCorp for a decade, pointed to the major trends in healthcare, affecting what companies need to do “tomorrow.” They include value-based care, tools and technology such as wearables, and the increasing role of the consumer.
“We have the best healthcare capabilities in this country, the best technologies and the best providers in the world. What we don’t do is always deliver the best value.” That is largely due to the opaqueness of healthcare pricing, he said. “You go to the doctor and three months later you get the bill and find out what it actually cost you. You would never entertain doing that at a car dealership.”
Tools that offer pricing transparency could help if available to the patient at the healthcare decision-making point. “We’re building tools to be transparent,” King said. “So patients will get an estimate of what their tests cost at the time blood is drawn. We’re working on needing less blood. We’re continuing to expand and broaden our relevance through patient-facing engagements.”
Where do consumers go for a second opinion? Dr. Google
Where do people go for a second medical opinion? he asked. “Doctor Google. The role of the consumer is getting “Bigger and bigger” in healthcare, he noted. We need to recognize that to be relevant.”
Another important consideration affecting healthcare is the need for stable social situations, such as access to housing and food, a topic discussed by other speakers at the Summit, including NC Secretary of Health and Human Services, Mandy Cohen.
Both King and Cohen pointed out that many NC rural counties face serious healthcare challenges. “Fifty counties in NC are emptying out and declining with people leaving because the economy isn’t there,” King said. “In 2011, 20 percent of NC residents had experienced food insecurity at least once and 24 counties were described as food deserts with low income. More than 33 percent did not live within a mile of a full service grocery store.”
The lack of a stable environment, housing, access to food, and poverty are the “Four horsemen of bad health” leading to excessive and expensive emergency room visits.
“Get involved in your company with the social components of health,” King said. “Critical thinking and sustained effort can solve these problems.”
