How to Resolve the Coronavirus Testing Crisis

How to Resolve the Coronavirus Testing Crisis
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The administration’s guidelines for “Opening Up America Again” rely heavily on the ability of states to develop a robust COVID-19 testing capacity, and Congress is negotiating adding as much as $25 billion to this week’s funding bill to significantly expand testing.

A dramatic increase in coronavirus testing is needed before people will feel safe to return to work and the marketplace, but an equally dramatic shortage of testing capacity threatens to cripple the recovery.

Congress will deserve credit if it does immediately support funds to enhance the nation’s testing capacity in the $400-billion amendment to the CARES act it is expected to pass this week.  But the bill is hastily drafted, and it’s unclear if $25 billion is the right amount or whether it is efficiently and appropriately allocated.  Democrats reportedly want the federal government to determine the number of tests each state receives, but Republicans want states to make decision. Devolving control to the states is clearly the right approach to focus resources where the need is greatest.

As of April 20, nearly 4 million tests had been performed in the U.S., roughly half the rate, on a population basis, of Germany, Italy and Spain.  The biggest stumble so far in the U.S. coronavirus response involved the mountains of red tape and bureaucratic control at the CDC and FDA over design and approval of tests.  This government-imposed bottleneck delayed widespread testing until private companies were allowed in. 

Now that tests are available, volume needs to be ramped up. To do that, the U.S. must overcome the current shortage of processing equipment and testing supplies, including critical chemicals needed to process samples and produce test results.

Processing a COVID-19 test can be time-consuming and expensive. A New York Times report tracks a nasal sample’s journey involving “3 Vans, 6 Coolers, a Plane, a Storm and 2 Labs.”  The initial strain in testing “came from a lack of test kits, but now there are not enough nasal swabs, not enough nurses. There is a pileup at the labs themselves and a limited supply of the chemicals needed to identify the virus,” the Times reports.

Quest, a major clinical lab chain, can process 35,000 specimens a day at 12 locations around the country. State-run laboratories may process only a few dozen samples a day.  And hospitals and doctors’ offices, still fewer. The U.S. needs industrial-grade capacity.

A report released by the American Enterprise Institute and co-authored by former Food and Drug Administration Commissioner Scott Gottlieb said at least 750,000 tests must be run per week.  A new paper by the Foundation for Research on Equal Opportunity estimates that the U.S. will need to administer one million tests per day, and to repeatedly screen the entire population, the U.S. will need to reach 22 million tests per day.

While there has been some relief in coronavirus response legislation passed earlier by Congress, it is far from adequate.  “Our labs have to acquire additional equipment, purchase much more in testing supplies, and make capital investments to build surge capacity,” according to Julie Khani, president of the American Clinical Laboratory Assn. 

As we move to the next phase, we also will need serological tests for surveillance to determine who is immune as well as molecular tests for virus diagnosis. There will be a new challenge in paying for serological tests at wide scale, and the federal government may well need to provide funding since private payers aren’t in the business of public health surveillance.

While the nation has been demanding enhanced testing, the labs have been struggling. Volume has collapsed for normal bread-and-butter testing, and payments for COVID-19 tests often don’t cover processing costs. Clinical labs have actually had to furlough employees. Quest reported that during the last two weeks of March, the company's test volumes, inclusive of COVID-19 tests, fell by more than 40% because government shutdown orders have curtailed the provision of non-emergent care.

The federal government has taken some constructive steps. The Centers for Medicare and Medicaid Services announced this week Medicare will pay labs $100 for high-throughput coronavirus tests, nearly double the amount it currently pays for conventional tests. CMS said the higher reimbursements will “allow for increased testing capacity, faster results and more effective means” of addressing COVID-19.

Congressional leaders are encouraging action: “Without more tests with quick results, it will be difficult to contain this disease and give Americans confidence to go back to work and back to school," said Sen. Lamar Alexander, who chairs the Health, Education, Labor and Pensions Committee.

Senate Majority Leader Mitch McConnell (R-KY) said earlier health care should be a top focus of the fourth bill.  Senate Minority Leader Charles Schumer (R-NY) and others just released a plan to provide $30 billion in emergency funding to increase testing and build out a structure for administering tests across the country. 

While some may object to adding billions more for clinical lab testing to the legislation, not doing so will mean a weakened industry that will struggle to provide the testing that is vital to getting the U.S. economy functioning again.

Resources are being directed to hospitals to compensate them for empty beds, but the most critical link in the chain of recovery is identifying who has the virus and who doesn’t so people can get back to work.

Ramped up clinical laboratory capacity and testing hold the key to recovery, and dedicated federal funding is the only immediate solution.

Doug Badger is a senior fellow and Grace-Marie Turner is president of the Galen Institute, a non-profit research organization focusing on patient-center health reform solutions.

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