Read at the Harvard Business Review HERE
Businesses, universities, and entire communities are realizing that while the Covid-19 pandemic continues, testing whole populations may be necessary to resume in-person interaction without uncontrolled outbreaks. “Assurance testing,” as we call it, faces novel challenges and requires a novel strategy: Online marketplaces for testing that make it simpler and cheaper for organizations and communities of any size to get their members tested while making it efficient for labs and test administrators to make tests available when and where they are needed.
The Daunting Challenge
The economist Paul Romer was among the earliest to recognize that universal testing could enable groups to work, live, and socialize together without causing outbreaks of Covid-19. In attempting to resume activities where social distancing is difficult or infeasible, some businesses, universities, and other organizations — even towns — have sought to deploy universal testing anywhere from daily to weekly to just a single occurrence (to confirm they have little or no disease).
Consequently, assurance testing requires far greater scale than medical testing (which is used to make a diagnosis for people with symptoms or a high-risk exposure such as close contact with an infected person) and surveillance testing (which is used to track at-risk subgroups for signs of spread).
Given the much larger scale, repurposing existing medical and surveillance testing infrastructure probably would not suffice even in countries with single-payer systems and extensive public testing capacity. Building an adequate capacity in the United States, with its multi-payer, overwhelmingly private health care system, will be an even greater challenge. But if done right, the increased volume and predictability of assurance testing could help lower testing costs, increase innovation, and provide wider, more equitable access.
Today organizations that wish to provide assurance testing require significant resources to not only buy testing but also to figure out whom to test and how frequently, and to establish the complex logistics and contracting required with testing organizations, labs, and others (building managers, tent companies, clinical staffing, etc.). While large, well-resourced entities can organize bespoke solutions (such as creating their own drive-up testing site), the high cost and lack of scalability leave smaller entities without viable solutions, which increases vulnerability for everyone in a community.
Meanwhile, testing companies, university labs, and hospitals that could add much needed capacity to the system find it cumbersome to contract and set up billing arrangements with all the organizations needing tests and to establish local testing sites. Without visibility into future volumes they are not able to optimize investments in increasing capacity and driving innovation.
This is a classic many-to-many problem. There are many organizations and communities that need tests, and there are many organizations involved in delivering tests. And we lack a mechanism to bridge this many-to-many complexity.
The Solution: Online Marketplaces
Romer has suggested that the federal government simply pay for the entire population to get tested at an appropriate frequency. He argues compellingly that the cost to do this is far lower than the damage to the economy without testing. Others have suggested that city or state governments or interstate compacts can negotiate bulk pricing. Right now, it’s a mix of private and public sources. But regardless of who is paying, there is a need for a platform to enable organizations throughout a community (whether employers, schools, nursing homes, or neighborhoods) to obtain tests and contract in a transparent and standardized way.
The reality of organizing testing today is that test sites and buyers are local. But a marketplace with broad civic participation that ties local needs to national capacity would allow buyers of tests of any size, testing labs, and testing site operators to discover and contract with each other.
Such a marketplace would complement efforts by national firms (such as commercial labs and retail pharmacies) that offer testing solutions to large organizations and at retail sites. It would help drive down the cost of testing through scale, transparency, and efficiency. It would facilitate the rapid adoption of innovations in technologies (e.g., new kinds of tests), processes (e.g., pooled testing), and business models (e.g., prepaid and subscriptions). It would accommodate different funding approaches (e.g., employer paid, public coverage, philanthropy, or “charitable commerce” such as buy-one-give-one models). Finally, it would go a long way towards achieving the level of coverage that many locales need even if there is insufficient public testing.
The challenge for creating such marketplaces is they require a critical mass of buyers and suppliers to get going, a quintessential chicken-and-egg problem. Local leaders, however, could kickstart them by making seed investments and committing their personal names and institutional brands to the efforts. The requirements of current diagnostic testing likely make establishing a single national or international marketplace infeasible. But as technology evolves and experience with such marketplaces accumulates, they could extend to serve larger geographies and communities.
Regardless of scale, a successful marketplace for testing has six essential components.
1. Testing labs. To get off the ground, the marketplace needs at least one initial test-lab partner. There are incentives for labs to want to join the marketplace: It will enable local hospitals, academic centers, and commercial labs with untapped high-throughput lab capacity to efficiently find buyers and manage the logistics efficiently. It will provide prepayment and guaranteed volumes that will accelerate investment by players. And it will create a pathway for them to introduce new testing technology in markets.
2. Bundled products and services. The marketplace needs bundled products and services that are easy for organizations and communities to purchase. For example, it should offer different subscription packages, each of which provides a certain number of tests per student, employee, or community member. It needs an account manager to market the service and manage the billing and other services relating to buyers of tests.
3. Network of test site administrators. The platform needs a critical mass of partners who can run test sites. This could include anyone from large national chains with many retail locations to local ambulance companies or health providers that can establish walk-in or drive-up locations on demand.
4. Standardized contracts and checklists. Currently, organizations seeking testing must all struggle through numerous operational and legal details. Each one is having to work through arrangements with an array of entities such as landlords, tent companies, and even cities. The marketplace can simplify processes and contracts through templates, checklists, and other means of sharing best practices.
5. Enabling software and logistics management. The marketplace needs software that can efficiently manage: how buyers of tests and suppliers can find each other; how tests are purchased and funds flows are managed; how access to tests sites or deliveries of tests are secured; how members are identified and tracked; how a physician order for each test is obtained (a common legal requirement we think should be removed); and how information — including test results — is made available in real time to patients, sponsors, and the state (for contact tracing and surveillance). As test technology changes, the details will change (e.g., self-administered home testing will require different logistics and information systems from the samples collected at a walk-up location). But the marketplace will still likely be needed to provide organizations and communities with options, including for the logistics of getting test kits to testing sites or directly to users and the samples back to the lab.
6. Supportive government actions. The public sector has an important role to play in ensuring equity in provision of testing to all communities and accelerating the pace at which such marketplaces are scaled up. Local, state, or national governments can do this as buyer of tests (for populations and public employees), as a supplier of publicly run testing sites and labs (offering a public option that provides a pricing reference point on the platform), or as the operator of a marketplace.
Governments should also support the adoption of assurance testing by promoting guidelines for such testing and providing organizations that follow these guidelines a safe-harbor from lawsuits relating to Covid-19 infections in order to provide a meaningful incentive for organizations to test their members at the appropriate frequency. Public agencies can also approve cheaper, lower-sensitivity tests for frequently-repeated assurance testing and encourage approved group testing strategies (initially pooling samples from several people in one test to reduce costs). It would also be beneficial to allow “standing orders” that remove the need for a separate physician order for each test like those issued by many governments to allow the opioid-reversal drug naloxone to be dispensed without a physician’s prescription.
Assurance testing can be a critical lever to reopen economies and it is imperative that business and civic leaders come together to establish marketplaces that provide the elements to achieve the necessary scale.