Published in USA Today, Oct. 21, 2022

American Diagnostic Testing is Broken. These Secret Systems Hide the Fix.

The story of why the richest nation in history failed to adequately respond to the deadliest pandemic of modern times begins on the Scattering Fork of the Embarrass River. Six days before Thanksgiving 2021, Emily Gurley, one of the world's top experts in public health, traveled to a small town in Illinois to save her mother-in-law's life.

Phyllis Adams was born 81 years ago in Tuscola, a railroad junction 160 miles south of Chicago and just east of Scattering Fork. She had attended an event with family members, some of whom were infected with COVID-19. Days later she started feeling sick. A rapid test proved positive. Odds were 96.2% that Adams had COVID-19. 

But Adams’s doctor didn’t trust the result. So before he approved Adams for treatment, the doctor ordered a molecular test, commonly called a PCR test.

A swab was jammed into Adams’s nose. The sample was packed into a tube and shipped to a distant laboratory, where it was affixed with a barcode. Next, the sample was loaded into a network of computerized systems, along with reams of Adams’s personal and medical data. The test was run, using a machine so expensive that only the most sophisticated laboratories in the world can afford one.

Most of these machines are owned by two companies, Quest Diagnostics and Labcorp. Since the United States is one of the only developed nations without a robust public testing network – in which government labs perform millions of routine tests a day, and provide crucial reserve capacity during health emergencies – Quest and Labcorp form a duopoly that dominates the American laboratory diagnostics industry.

When Adams’s test was finished, the results were interpreted by the lab’s trained medical technologists. Finally, the lab sent the results to the doctor.

The test itself took six hours.

Everything else — the movement of patient samples and information through America’s scattered, complex, and broken networks of diagnostics logistics, data, and test machines— took four times as long. In normal times, and especially during the COVID pandemic, a one-day turnaround time for test results is considered speedy. It’s about as fast as America’s invisible infrastructure of testing can go.

But against a pandemic that spreads in seconds, and often without symptoms, many experts say COVID has proven conclusively that testing in America has grown too complex, too privatized, too disconnected, and too slow.

On March 12, 2020, Dr. Anthony Fauci called this situation “a failing.”

Experts say it remains a failure still.

“At the beginning [of COVID], labs faced demand they couldn’t meet. They couldn’t expand capacity. And they couldn’t move samples around the country,” said Scott Gottlieb, former commissioner of the Food and Drug Administration. “That is still the case. It’s hard to scale up and down. And we can’t move samples to places where there is testing capacity.”

Throughout the pandemic, every major surge in COVID cases precipitated a testing logjam. Patients were forced to wait three days, five days, sometimes even 20 days for results. COVID moves quickly, however, progressing among untreated patients from transmission to mild symptoms, oxygen depletion, organ failure, and sometimes death in about 18 days on average. Against this disease, delayed results produced by Labcorp, Quest, and other commercial and public labs are useless in the effort to stop the spread and reduce patient harm.

Journalists and health care professionals have documented several reasons for America’s cyclical testing failures. These include the decision by the Centers for Disease Control to send out faulty tests during the pandemic’s first few weeks, public statements by former President Donald Trump encouraging public health labs to slow down testing, and decisions by the administrations of Trump and Joe Biden to emphasize vaccines more than testing.

These failures are important, and widely understood by medical and policy experts. They also skim along the surface. Better CDC decisions or presidential orders cannot address the deep, structural barriers that prevented the United States from scaling up testing in response to COVID. Left unaddressed, these barriers are slowing the nation’s response to monkeypox, and may lead to similar testing failures during future waves of COVID.

They also explain why Phyllis Adams’s 24-hour turnaround time constituted a success by the system, even though it represented a failure for the patient.

These barriers are:

1. Public health. In a national health emergency, public agencies should lead. But for generations, governments at the local, tribal, state and federal levels have starved such institutions of resources. In this vacuum of public leadership, private companies improvised solutions that value quarterly profits over the nation's long-term health.

2. Data. Quest Diagnostics and Labcorp each gained power over the industry partly by competing for monopoly contracts with hospitals and insurers. In exchange for lower average test prices for hospitals and insurance companies, these contracts mandated that doctors order tests using software that presented Quest or Labcorp as the first and only choice. When COVID overwhelmed the duopoly, doctors had no power to send samples to smaller labs with excess capacity. They were stuck with Labcorp and Quest.

3. Logistics. Quest Diagnostics and Labcorp operate the only national logistics networks for testing. When their networks get overwhelmed, everybody waits.

4. Test machines. Some experts believe the United States has all the machines it needs to test for COVID-19. But everything about those machines is a trade secret. Which makes a coordinated emergency response impossible.

As publicly traded companies, Quest and Labcorp built the nation’s largest diagnostics networks to generate maximum efficiency and profit for their shareholders. They have no mandate to build excess capacity into their systems for the unpredictable, inevitable event of a pandemic. Nor have they received the billions of dollars in government subsidies – prior to COVID or during the pandemic – that would be required to build surge capacity.

It’s no surprise, then, that America’s balkanized testing networks keep getting overwhelmed.

“There was no consistent system” before COVID-19, said Mara Aspinall, a former testing company CEO and an advisor to the Rockefeller Foundation’s project to improve COVID-19 testing in America. “And there still isn’t.”

All that left Emily Gurley, an expert in saving the lives of millions, trying to keep a single person alive.

Adams finally received her second positive COVID-19 test result on the Friday before Thanksgiving. By then she could barely breathe. Her age makes Adams a high-risk patient. Yet she received no medical care for three days – in rural Illinois, hospitals didn’t provide monoclonal antibody treatment on weekends

If her blood oxygen levels dropped, her organs would fail. Phyllis Adams would begin to die.

So Gurley took a vacation from her job at Johns Hopkins University, the institution that arguably invented modern public health. She caught the first flight Saturday morning from Baltimore to Indianapolis, rented a car, and drove 115 miles west to Tuscola.

On Sunday, four days before Thanksgiving, Adams’s blood oxygen levels fell again, to dangerous levels.

"What I keep thinking about is: Good grief! This is not the first wave!" Gurley said by phone from Tuscola.

On Monday morning, Gurley packed Adams into the rental car. It was 30 degrees outside, and the hospital was 30 miles away. For safety, they drove with the windows down. Adams sat in the backseat under a blanket and Gurley’s heavy coat. In the rearview mirror, Gurley could see only her mother-in-law’s eyes.

“She looked pretty pitiful. She was very sick,” Gurley said. “We need to do a better job with testing. It’s infuriating. Why is it this way? I have no idea! It makes no sense.”

Testing in America: Complex but invisible

This spring America passed a grim milestone: More than 1 million Americans dead from COVID-19, a higher death count than any other nation on earth. Roughly 94 million cases of COVID-19 have been diagnosed in the United States, more than twice as many as India, the country with the second-highest case count. That represents a mortality rate of 280 people per 100,000, giving the United States the highest mortality rate of any industrialized nation. Americans infected with COVID have died at a rate five times greater than people in Japan.

During the height of the pandemic, Germany, Israel and the United Kingdom tested about seven times more people every week than the United States, when adjusted for population. Poorer countries including Georgia and Slovenia performed three times as many tests per capita. Tiny Cyprus performed about 8,800 COVID-19 tests a week, a rate 40 times greater than the richest nation on earth. 

Studies suggest that countries and states that performed more tests, and which tested a higher proportion of their population, suffered fewer COVID deaths.

During the first rollout of tests in March 2020, before rapid over-the-counter tests were available, Quest Diagnostics experienced a backlog of 160,000 samples to be tested, according to a company statement. Average test turnaround times by Quest and Labcorp reached five days. In April 2020, the state health lab in Louisiana regularly waited 16 days for results. In July of that year, Labcorp and Quest reported average turnaround times of a week or more, followed by similar delays in August and November. The pattern repeated throughout 2021, including in the Omicron surge in the New York City region, which caused five-day testing delays into January 2022. 

This rendered the results useless, because patients didn’t know to quarantine or seek treatment until the disease already had caused serious illness and infected new people. And still, the United States has failed to create a fast, nimble national network for COVID-19 testing, experts say.

“I think it’s just a huge failure that we just basically abandoned testing,” David Perlin, chief science officer at the Center for Discovery and Innovation, part of Hackensack Meridian Health, New Jersey’s largest hospital chain, said in January 2022. “We have a finite capacity of testing. And we don’t really have surge capacity right now.”

Politicians can’t fix the system because they, like most Americans, can’t see it. Diagnostic testing in the United States is privatized, complex, and opaque. Only a handful of health care executives and academic researchers – people who spend their lives studying the system – understand it well enough to diagnose where it’s failing.

Genetic tests, including PCR tests for COVID-19, cannot happen without “complex systems of data, logistics and test machines to deliver results," said Jennifer Nuzzo, an epidemiologist and public health expert at Johns Hopkins University. "These systems are slow. When they become overloaded, as they have during every COVID-19 surge, these systems bottleneck and fail.”

“It’s a network problem. It’s a logistics problem,” Gottlieb said. “The testing system is established along contracted pathways.... You have sticky relationships. There’s no ability in a public health crisis to break those prearranged pathways and shift demand where the supply is.”

This reporting will first explore how testing before COVID-19 was big, but brittle. Then, we will examine how the pandemic caused the infrastructure of American diagnostics to fail repeatedly, precisely as experts predicted. Finally, experts will speak to solutions that dive below the blame game of pandemic politics, and which seek to create a new system of diagnostics that is nimble and reliable, even during a public health emergency.

Before COVID, Congress knew public health needed more resources

Diagnostic testing in America is so complex, even the people who work the front lines can’t understand how it works.

Zolanlly Brunson leads public health outreach in Coney Island, a neighborhood in Brooklyn known for its famous roller coaster and hot dog stand that is also among the most diverse places on earth. Together Brunson and her team of workers stand on sidewalks and help people find COVID-19 vaccinations and tests for a nonprofit called Brooklyn Community Services. 

In December 2021, Brunson needed to get her family tested before a social event. They went to a popup site she knew well.

The family waited eight hours. Eventually, they were tested. They got the results that night. Brunson and her son were negative.

Her husband, Steven, had COVID-19.

Brunson’s family life, and the public health effort in Coney Island, fell apart. For safety, Brunson and her son, Steven Jr., moved in with her in-laws, a few miles away. They got tested again, this time at Cumberland Hospital in Brooklyn.

Then she waited and worried. She worried for Steven, who tried during phone calls to disguise his labored breathing. She worried about infecting her in-laws, both in their late 50s. She worried for her own health — she was five months pregnant. She worried for Steven Jr., who missed connecting with his mother on their after-school train ride home.

She also worried for the people in Coney Island.

Talking to strangers about COVID-19 is exhausting work. Whenever she took a sick day, Brunson found, her team slacked off. But the rules were strict. Brunson’s team was charged with speaking to 500 people every week, with special efforts to engage homeless people and drug addicts. They had to spend 10 hours a week in one-on-one conversations, helping people navigate the byzantine world of COVID-19 testing.

One common problem they encountered: Most labs send results by email, Brunson said. But many poor people in Coney Island have no smartphones, computers, or email.

Waiting made Brunson feel frustrated. She received her negative result after two and a half days. But in the world of diagnostic testing, that’s considered speedy.

“I’m putting my in-laws’ lives at risk. And I’m pregnant,” Brunson said. “I feel like I was misinformed. Had I known the hospital would take one to three business days, I would have just gone to a random popup shop.”

Can't even kill a mosquito

On Jan. 27, 2020, health officials in South Korea convened an emergency meeting with health company executives in Seoul’s busiest train station to deliver a simple message: Make tests. Now. We’ll approve them, and we’ll pay you.

One week later, the first test went to market. This organized and national effort, matched to contact tracing, caused COVID-19 infection rates to plummet by mid-March 2020, just as New York City and New Jersey entered their first wave of widespread COVID-19 deaths.

In April 2021, Britain’s National Health Service offered to mail free COVID-19 rapid tests to everyone in the country. By Christmas, Britons were performing 1.1 million rapid tests a week. The strategy worked, detecting hundreds of thousands of new cases.

Raquel Viana, a science director at one of South Africa’s largest private laboratories, discovered a radically infectious strain of COVID-19 on Nov. 19, 2021.

This strain later would be named Omicron.

It’s no accident that scientists in South Africa found Omicron sooner than their American counterparts, even though the strain was present in both countries, said Jeffrey Klausner, a public health expert at the University of Southern California.

The United States operates more molecular testing machines than South Africa. We sequence the genes of more COVID-19 samples than South Africa, from a higher percentage of our population, which is five and a half times larger than South Africa’s.

But two years into the pandemic, American public health agencies still can’t perform high-throughput COVID-19 testing. Decades of underfunding shattered disease surveillance systems, turning even small outbreaks into all-hands-on-deck emergencies.

“I’m just back from South Africa two days ago, and they have a national lab system for the entire country. It’s all one centralized system, so they can be more responsive,” Klausner said in November 2021. “Everybody trashes [the Centers for Disease Control]. But CDC never was set up to be a big lab test provider or to scale up testing.”

The Zika outbreak in 2016 and 2017 sickened more than 5,000 people in the United States and raised public alarm about the possibility of birth defects.

After the outbreak passed, the Government Accountability Office published a series of reports documenting the nation’s failure to respond:

• Public health agencies didn’t have enough money to respond to emergencies, the GAO found. Surges of funding from Congress help. But that money arrives too slowly, and doesn’t persist after the crisis is over, repeating a cycle that leaves agencies underfunded for the next emergency.

• Public health agencies at all levels lacked the computers or the staff to perform surveillance on the disease as it spread, another GAO report found.

• Existing surveillance systems couldn’t work together.

The CDC is supposed to give local health agencies money and technical support for mosquito control. But because mosquito-borne diseases are cyclical, and so is the agency’s funding, most of the CDC’s mosquito experts had been laid off due to budget cuts before Zika hit. 

The few who remained didn’t know which state and local health departments even had programs to kill mosquitoes.

“During Zika we saw a significant bottlenecking at public health labs, and the same problems of stove-piping,” said Dr. James Lawler, an infectious disease and public health expert at the University of Nebraska. “It’s this balkanized system. When you want the whole system to respond coherently and together, there’s no mechanism for that to occur. And we haven’t addressed that concern, even today.”

Lab technology funding: Too little, too late

As the crisis subsided, public health experts went public with their concerns about how testing had failed during Zika. The Council of State and Territorial Epidemiologists is a trade group that represents disease researchers. In April 2019, the group began a lobbying campaign aimed at convincing Congress to approve higher funding for public health data and surveillance systems.

In reports and testimony to Congress, testing experts described how they still send test results by fax. Workers deliver paper copies of test results using their personal cars. With no barcode system to track patient data electronically, the CDC required local agencies to include a paper requisition form every time they mailed a sample for testing.

When important data arrives by paper, the recipient must pay someone to type it into a computer. This work is slow, and prone to error. Such antiquated systems turn even a small measles outbreak into an emergency that requires all-out effort by an agency’s entire staff, the council wrote in a report to Congress.  

“Public health is scrappy,” said Janet Hamilton, the Council of State and Territorial Epidemiologists' executive director. “But the data connectivity issues are substantive and real.”

For example, before two public agencies share a single diagnostic test result, both must sign a data use agreement, said Michelle Meigs, director of the informatics program at the Association of Public Health Laboratories, which advocates for public testing labs.

Such agreements establish what data will be shared, across which computer systems, in which template, according to which privacy protocols. If a shred of that data goes missing, the contracts determine who’s to blame in court. 

The best reason to digitize health data is to make it faster to share. But the negotiations required to complete these data agreements seem designed to slow everything down, Meigs said. 

“It becomes a red-tape nightmare,” Meigs said.

In this world of pre-pandemic dysfunction, experts agree that Quest and Labcorp operated the best systems for communicating test results to public health agencies. The CDC requires labs to report positive test results for about 100 diseases and conditions. Labcorp and Quest took this responsibility seriously, Hamilton said, creating speedy data connections with public health agencies across the country.

“I would say Quest and Labcorp, they work very hard to partner with public health,” Hamilton said.

To improve connections between public labs, Hamilton's group kept lobbying Congress. After a year and a half, they won. 

Sort of.

Congress appropriated $50 million to upgrade government data systems. The money was to be split between the CDC and 56 public health agencies operated by states and Native American tribes.

“$50 million isn’t a lot,” said Scott Becker of the Association of Public Health Laboratories. “There’s not been support from the states or the federal level to improve that infrastructure. Ever.”

The vote happened on Dec. 21, 2019. By then, at least 23 people in California had COVID-19.

Private lab data before Covid: Warring castles in the testing duopoly

Mark Brown witnessed the birth of modern diagnostic testing from the backseat of his mother's station wagon. He just doesn't remember it, because he was a newborn himself. Mark’s father, Paul Brown, was 29 in 1967 when he founded Metropolitan Pathology Laboratory by borrowing $500 to rent an apartment in upper Manhattan.

The operation’s logistics were straightforward. Paul Brown’s wife, Cynthia, packed their eldest son, Richard, age 3, and Mark, the infant, into the family station wagon. She drove a few blocks to Columbia Presbyterian Hospital to pick up Pap smear slides. Then she drove back to the apartment, where her husband stained the slides by hand in the bathtub.

“I do remember double-parking at the hospital,” Cynthia Brown said by email.

Brown and Dr. James Powell were residents together at Englewood Hospital in New Jersey, where they worked with one of the first commercially available automated testing machines. Brown integrated such machines into his company, later renamed Metpath, which became Quest Diagnostics.

Powell returned to his hometown of Burlington, North Carolina, to create Biomedical Laboratories, which used similar technology. After a series of mergers and acquisitions, Powell’s company became Labcorp. 

Both companies — called the "blood brothers" within the testing industry — grew aggressively, simultaneously, and by similar means. Automated lab machines were expensive, and required vast quantities of samples to operate profitably. Using these greater economies of scale, both companies lured testing contracts away from traditional, smaller labs by promising doctors and hospitals faster, cheaper tests.

Some small labs went out of business. Others became targets for acquisition. In time, Labcorp and Quest hunted bigger game. 

Quest purchased SmithKline Beecham Clinical Laboratories in 1999 for $1.3 billion. It followed with deals in 2002, 2003 and 2005, in which Quest paid $2.2 billion for three major competitors.

Labcorp paid $480 million to acquire Dynacare in 2002. It paid $925 million cash for Genzyme in 2010, followed by a deal in 2014 to acquire Covance for $6.1 billion.

Competitors came to view Labcorp and Quest as more focused on mergers and acquisitions than they were on running laboratories.

“They’re not lab companies,” said Richard Faherty, a former laboratory executive who served as chief information officer for BioReference Laboratories. “They’re M&A companies in the lab space.”

Labcorp, Quest Diagnostics and their trade association, the American Clinical Laboratory Association, did not respond to requests for comment for this story. In a recent blog post, the association said its members “deliver screening and diagnostic test results that serve as the foundation for early diagnosis, disease prevention, and personalized care for millions of patients each day.”

Today, independent labs that operate outside of hospitals have three options, said David Flack, owner of Pathology Associates of North Texas, a small lab in Wichita Falls.

They can find a low-profit niche that Quest and LabCorp care little about – maybe performing allergy tests, or operating in places like Nebraska, where low population densities can’t support Quest and Labcorp’s expensive logistics networks.

They can agree to be purchased.

Or small labs can risk direct competition with Quest or Labcorp, which have massive economies of scale, cheaper tests, and armies of salespeople dedicated to winning contracts with hospitals.

“It’s a duopoly,” Flack said. “As the duopoly cannibalizes more places like us, you have fewer places to do the work. We’re a flea on an elephant.”

“Quest and Labcorp monopolize through financial arrangements,” said Jay Weiss, president of Allermetrix, an allergy testing lab outside Nashville. “Their ability to acquire laboratories, to work in exclusive arrangements state by state, allows them to inch out other competitors.”

After Quest and Labcorp had purchased most rival laboratories, they started to pursue monopoly contracts with insurers. Labcorp signed a $3-billion, 10-year contract in 2006 with United Healthcare, becoming the insurance giant’s exclusive provider of diagnostic tests for 11.1 million people. Quest Diagnostics, not to be outdone, scored access to test all 16 million people insured by Aetna in March 2007.

Next the testing giants pursued similar contracts with big hospital companies. Quest took over inpatient testing for all seven hospitals owned by Barnabas Health in New Jersey in December 2015, and a similar deal six months later with HealthONE hospitals in Denver.

In the health care industry, this is called “narrow networking.” The practice locked in the duopoly’s advantages, while locking their smaller rivals out. Quest, Labcorp and their trade association did not respond to questions about the narrow networks.

“The biggest problem is the large national laboratories compete not on quality and service; frequently they compete with contracts that eliminate the competition,” said Mark Birenbaum, executive director of the National Independent Laboratory Association. “It means that eventually with time, other labs are forced out of business, forced to merge or sell because they can’t get in-network with major insurance carriers to get business. It means the big labs continue to grow in volume and strength.”

Labcorp, Quest Diagnostics and the American Clinical Laboratory Association, the trade organization that represents the nation’s largest labs, did not respond to requests for comment on narrow networks.

In recent years, narrow networks became slightly less narrow. On Jan. 1, 2019, UnitedHealth Group opened up its contract, keeping close ties with Labcorp but allowing Quest Diagnostics to be considered in-network for the company’s expanded population of 48 million enrollees.

On the same day, Quest lost exclusive access to 20 million insurance customers when Aetna allowed Labcorp into the network.

By then, however, few direct competitors to Quest and Labcorp remained. The duopoly possessed vast data, logistics and laboratory systems, capable of processing massive volumes of patient samples quickly and efficiently.

Under stress, however, these systems grow brittle. That’s partly because the era of narrow-network lab contracts happened to coincide with the biggest change in medical records since the invention of the ballpoint pen. 

Medical records technology: Broken in a colossal way

In his professional life as founder of one of the world’s first automated diagnostic laboratories, Paul Brown embraced computers. In his personal life, Brown didn’t see the point. Whenever his sons sent him an email, Brown invited his secretary into his office. He would dictate a response. Then the secretary would return to her desk, type her notes into an email, and send it.

“He and I would laugh about it,” Brown said. “He would say, ‘I respond to all of your emails. I just do it through transcription.’”

Mark followed in his father’s footsteps. Both attended Harvard University. Both built careers merging medicine and technology. Mark became an ocular-facial surgeon, a rarified specialty that depends on the latest computers and plastics. He also started his own company, called EyePlastics.com, which offers patient referrals to other doctors in the field. He wrote the software himself.

Growing up in a family that helped invent modern healthcare data systems, Brown gets angry when those systems fail. Every day he deals with hospital electronic records systems, which he describes as slow and counterintuitive.

“It’s a lot of drop downs. It’s very hard to enter free text. It’s impossible to do diagrams,” said Brown, whose practice is located in Mobile, Alabama. “They’re just not meant for humans.”

When a patient transfers from one hospital to another, electronic health records should make it easy for her medical data to travel with her. But it’s never easy, Brown said. The problem, experts agree, is that hospital data systems often can’t talk to each other. This creates special problems for a surgeon like Brown, who has operating privileges at all four hospital chains in Mobile.

Every time a patient transfers to a different hospital, Brown must dig deep into the first hospital’s computer system, download the patient’s medical file, send it to himself in an email, and hope he doesn’t accidentally miss anything.

“It’s broken in a colossal way. There is no sharing of information among providers or labs,” Brown said. “I know what computers are capable of. And it’s just we, the United States, have failed.”

Go digital? Not so fast.

As recently as 2009, most American health care happened on paper, said A. Jay Holmgren, assistant professor of healthcare informatics at University of California, San Francisco. That changed when President Barrack Obama signed the 2009 HITECH Act, intended to bring doctors and hospitals into the modern era. Under the law, Congress eventually allocated $35 billion, primarily to subsidize the implementation of Electronic Health Record, or EHR, systems. Of that motherlode, Holmgren said, little was dedicated to digitizing public health.

Most went to private hospitals and doctor’s offices. The market for digitized health records was already dominated by its own pair of powerful companies, Epic and Cerner, which deliver reams of customer data to physicians using complex user interfaces. Their programs often resemble an old desktop IBM running do-it-yourself tax software for Windows, Holmgren said.

“It’s pretty ugly,” Holmgren said.

Cerner did not respond to requests for comment for this story. Leslie Selby, a sales executive at Epic, said the company employs teams of developers to constantly improve the user experience.

“The goal is to make the system a joy to use,” Selby said.

Today, electronic health record systems by Epic and Cerner function as the central nervous system for every decision made by hospital staff. From a single capsule of Tylenol, to complete health records for millions of people, everything is tracked by the hospital’s digital system. As they grew to perform so many complex tasks, medical records systems also became rigid. Surgeons like Brown no longer could draw diagrams of the body by hand, making the process of adding notes to a patient’s medical file slower and more cumbersome.

And every time a doctor orders a procedure, from a surgery to a COVID test, she is forced to use the drop-down menu built into her computer’s user interface. If her hospital has signed an exclusive testing contract with one of the major testing companies, then either “Labcorp” or “Quest” will appear, Holmgren said.

This is called “welded-in.” During normal times, it can make ordering tests simpler and faster than scribbling out orders by hand. It also locks in the duopoly’s advantage. Due to agreements that Cerner and Epic forge with hospital administrators, doctors find it impossible to shop for labs that might offer higher-quality service, more reliable tests, or faster turnaround times.

“Physicians are really busy, and they get paid by the volume of patients they see. It’s not in their best interest to spend a lot of time digging through menus,” Holmgren said. “Then we make it difficult to do anything but the default, so these things get welded in. You really can’t go outside of whatever lab options the system gives you.”

Another problem common to digital health records, experts said, is their complexity can make the data unreliable. Every hospital runs a stack of software programs. Each program may arrange its fields of data in a unique format. Every time a program passes data up and down the stack becomes an opportunity for the data to change, or to drop out entirely, said Thomas Durant, an informatics researcher at Yale School of Medicine. When a hospital sends data to a software stack operated by a competing hospital or an outside laboratory, the complexity multiplies, as does the likelihood that data will go missing.  

“You have billions of opportunities for error,” said Dr. David Black, a pharmacology professor at Vanderbilt University and founder of Aegis Sciences, a diagnostic laboratory company. “It’s so complex that when errors are made, they’re typically not one-offs. It’s easy to have hundreds of errors bundled together because they handle such tremendous volumes.”

When doctors receive test results with strange or missing data, they order another test, Durant said. During normal times, this isn’t a problem.

But when the only laboratory in a hospital’s computer system is already overwhelmed by a COVID surge, the combination of welded-in lab providers plus unreliable data makes the entire system fragile, and prone to bottleneck.

“Every data element has to persist through all these layers [of software] and not get dropped. That’s hard to do,” Durant said. “You can’t always trust that data to mean much. If clinicians don’t trust it, they order another test.”

Frustrated by the cumbersome menus and unreliable systems provided by Epic and Cerner, Mark Brown did something radical: He quit them. At great personal expense, Brown switched his office from Epic and Cerner’s interfaces, which he describes as terrible, to Modernizing Medicine, a small company that offers intuitive screens on iPads.

Private planes, private plans meet public health

The white Beechcraft Baron twin-propeller plane left Baltimore Washington International Airport a few minutes after midnight, achieved cruising altitude, then flew north at 180 miles an hour. At 1 a.m. on Jan. 27, 2022, it dropped its wheels and landed at Teterboro Airport in New Jersey, where the air was 18 degrees. To the east, the clear white lights of Manhattan’s skyscrapers lined the horizon.

Quest Diagnostics owns Quest Air, a private cargo airline with 26 planes. The fleet includes propellers and jets, many branded with the company’s name and bright green logo. The Beechcraft’s livery is more discrete, with white paint and maroon racing stripes, giving no indication of its purpose. The flight was tracked by publicly available aviation websites, and no outsiders witnessed its arrival.

It’s impossible to know for certain, but the plane probably was delivering samples to Quest’s newest laboratory, located eight miles from the airport in Clifton, New Jersey. The Quest logistics empire centers on five mega-labs situated around the country. The one in New Jersey is the newest and biggest.

This is what “efficiencies of scale” look like.

Opened in January 2021, it resembles an Ikea without the furniture. It sprawls across 250,000 square feet and cost $250 million to build, said Bob Roggeman, the Quest manager in charge of construction.

During a recent tour, Roggeman pointed to a row of silver doors along the north wall of the facility’s biggest lab. Each door is a refrigerator that can hold 330,000 test tubes of blood.

The last time Quest opened a mega-lab, in Marlboro, Massachusetts, in 2014, the company christened it the “lab of the future.” It can handle 60,000 test orders from doctors a night. This new laboratory in New Jersey is built to handle 140,000 orders a night, Roggeman said. Fully built out, the site will test 40 million people a year across seven states.

“This is the largest lab within Quest. By far the largest,” Roggeman said. “When you look at the industry, there’s continuing pressure to drive costs down. One of the ways you drive costs down is you consolidate. You maximize your assets, get your highest productivities and efficiencies.”

In an article for The New Yorker magazine, Atul Gawande, a surgeon and public health researcher at Harvard Medical School, wrote that Quest and Labcorp can be properly understood as “really logistics and distribution companies wrapped around a network of regional laboratories.”

The lab giants operate two of most sophisticated — and secretive — logistics networks in the United States.

“It’s very much a black box,” said Holmgren of the University of California, San Francisco. “Academics find it’s hard to dig into that data because Quest and Labcorp have been less of a partner. Because it’s such a duopoly of two companies, they just do their thing.”

Quest has done everything possible to make its new facility disaster proof. For redundancy, the laboratory has two automated assembly lines to move samples through the machines, Roggeman said. The facility is connected to two separate fiber optic networks, plus a backup power plant should it lose electricity. Quest has contingency plans to house essential workers at nearby hotels before major storms.

Yet the lab is so big, its very vastness places testing across the entire Northeast in danger. 

“We’ve got to stay in operation. If something happens to this facility and we couldn’t operate, there is nowhere to send that work,” Roggeman said. “Because nobody else has the magnitude of operations to support that volume.”

During the tour, Roggeman walked a delicate balance. He was charming, enthusiastic, and deservedly proud of the capable facility he’s built. He also was charged with keeping its secrets. Outsiders like journalists are invited inside to look around. But no pictures are allowed of the testing floor. For Quest and Labcorp, the number of machines they own, and the types of machines they operate, is proprietary information. Not even the federal government knows the mix. In normal times, that’s not a problem.

But in an emergency, when every available machine must run at maximum capacity, such opacity makes it impossible for the government to direct samples, testing machines and supplies where they’re needed most. 

“There’s no ability in a public health crisis to break those prearranged pathways and shift demand where the supply is," said Scott Gottlieb, former commissioner of the Food and Drug Administration. He cited the example of CityMD, a popular chain of walk-in health clinics in New York City.

"If CityMD sends all its samples to Quest, and Quest gets overloaded, there’s nothing that anyone can do," Gottlieb said. "You’re just gonna wait."

Testing machines made by different manufacturers present the same problem as electronic health record systems at different hospitals: They can’t talk to one another.

PCR machines give results in terms of “cycle threshold” or “CT value,” which counts the number of times a genetic sequence is copied. CT values matter because they show how much virus is present in a sample. A low CT means a patient is highly infectious, while a high CT means the person probably is not infectious at all.

A problem, said Mara Aspinall with the Rockefeller Foundation, is that each PCR test is different. Each decides the result by looking for different segments of the virus genome. Each chooses a different CT value to decide whether a sample is positive or negative. Even when two instruments from two different companies multiply the same genetic code an identical number of times, each machine gives different CT values for the same quantity of detected virus, sometimes by an order of magnitude, Aspinall said. In other cases, wildly different CT values may actually be identical in terms of infectiousness.

And because these differences are regarded as proprietary, there’s no easy way to translate between them.

“There’s no secret decoder ring,” Aspinall said. “And it is a secret.”

In many ways, Quest Diagnostics and Labcorp have accomplished the goals of their founders. They are huge. And they make lots of money. In 2021 the companies together earned $26.9 billion in revenue. That’s four times larger than the revenue of their seven largest competitors combined.

That size and scale comes with a cost, medical professionals say. Dozens of doctors and laboratory leaders interviewed for this story complained about how difficult it is to engage with Quest or Labcorp. Most did not want their names attached to this story, because they said they fear the duopoly’s power. When doctors and hospitals need answers to simple questions, like the chemical composition of patients’ blood, Labcorp and Quest do a phenomenal job, industry insiders agree, delivering huge volumes of test results quickly.

But when the duopoly’s systems fail — when providers need additional details about test results to inform their diagnoses, when Quest and Labcorp’s computers lose connection with hospital networks, or when testing platforms built for maximum profit and run with little excess capacity receive a spike in test requests — Quest and Labcorp’s highly automated systems often fail, experts said. There simply aren’t enough humans or machines available to respond to the unexpected.

“We can’t compete on price,” said Jay Weiss of Allermetrix. “When we do compete head-to-head with either Labcorp or Quest, it’s easy to win that business because our turnaround times are faster, the results are better, the physicians much prefer our customer service. I guess their strategy is to be the only provider.”

And when it comes to fast computers, fast logistics and fast service to doctors — the trifecta that built the Blood Brothers’ power — doctors complain that in many cases the great silos of diagnostic testing can no longer perform.

Mark Brown would like to hire Quest Diagnostics for some of his testing. But first he must establish a secure data connection between his office and Quest’s computers. This might seem important to Quest, since it involves the son of its founder trying to pay the company money.

Apparently it’s not so important. After six months of phone calls and emails, Brown said, Quest failed to make the connection.

“I can’t get Quest to do their part. I don’t know why,” Brown said. “I just emailed them again last week and said, ‘Holy crap, I don’t know how you guys are in business still. You guys have made a wrong turn.’ I really think my father would be disappointed.”

The Pandemic arrives: An empty shell

Here, then, was the state of diagnostic testing on Dec. 31, 2019, before the COVID-19 pandemic began. From the outside, America seemed prepared. Academic medical centers had the experts and technology to innovate powerful new tests in days. Labcorp and Quest Diagnostics possessed some of the largest testing laboratories in the world, connected to doctors and hospitals by high-speed computers and logistics.

But Congress, the Department of Health and Human Services, the Centers for Disease Control and people inside the industry understood this facade was fragile.

Quest and Labcorp equipped their labs in secret for maximum efficiency during normal times, with no excess capacity for emergencies. Samples, patient data, billing, and test results traveled along hardened pathways that were costly to build, slow to change, and impossible to escape. Data connections within healthcare silos were glitchy. Between silos, they didn’t exist.

Officially, the responsibility of responding to pandemics and other emergencies falls to local, state, tribal and federal public health agencies, including the CDC. In actuality, none of those public agencies has received anything close to the billions of dollars a year in funding required to build and maintain the reserve of test machines, or the billing and logistics networks needed to run them, all of which must be in place before a pandemic starts to handle the surge in test demand, said former FDA chief Gottlieb and Scott Becker of the Association of Public Health Laboratories.

Even in slow times, public agencies aren’t even in the game. Chronic underfunding leaves them no systems to perform diagnostic testing at modern speeds. No disease surveillance in real time. No data connections with hospitals or each other.

“Public health labs are not built for mass testing,” Becker said.

As pandemic crisis explodes, there are no answers

The Connecticut State Arsenal and Armory is a pile of granite located a block downhill from the capital in Hartford. When Tom Durant of Yale arrived in late April 2020, it resembled the set of an action movie just before the aliens invade. Uniformed members of the National Guard loaded boxes of COVID-19 tests onto military trucks. To Durant, it appeared the public health response to the pandemic was well under way.

“I remember walking in and thinking, ‘This looks very much like the set of 'Independence Day,'" said Durant, whose labs would perform much of Connecticut’s testing during the pandemic’s first wave.

Then he started asking questions.

How did the state plan to order tests? How would the order form be laid out, such that all the fields could be read by Durant’s computers at Yale? How would electronic orders comply with federal privacy law? After the lab analysis was complete, would Yale’s laboratory be required to send the results to its competitors, including other hospitals in Hartford? Would results be sent to doctors? To public health agencies? Could results be shared with the Connecticut state agencies? Or did public employee union contracts prevent such sharing?

Surrounded by the echoes of the armory, the public officials fell silent.

“The state testing people were there trying to figure out the analytic part. And we were saying: The analytic part is easy,” Durant said. “It’s the pre-analytic and the post-analytic parts that are hard. How do you order? How do you collect the sample? How do you get the sample to us? And then who do we report to? It’s not easy.”

Eighteen hundred miles away, in a featureless white office building by a highway overpass in Houston, workers at the Harris County Public Health department were learning what happens when none of those questions have answers.

To keep pace with the pandemic, contact tracers at the agency needed every patient’s name, contact and demographic information. But the electronic records systems used by doctors and hospitals send just a tiny slice of data to laboratories, said Janet Hamilton, the Council of State and Territorial Epidemiologists' executive director. Most test orders include just enough data to perform the test, like the patient’s name and insurance information, Hamilton said, but no phone number.

Labs are required to send all the patient data they receive to public health. Throughout the pandemic, Hamilton said, Labcorp and Quest have done this job well.

But labs can’t pass along data they never receive.

“Those interfaces could be set up that way” to include data needed by contact tracers, Hamilton said. “But 90% of the time, they’re not.”

When a doctor orders a COVID-19 test, her request travels from her computer into the vast software stack of a hospital records system, Durant said. Then it’s sent to a laboratory, where it travels more layers of software down to the test machine itself. The test is run. Then the patient’s data travels back up the laboratory’s stack, then out to the doctor, the hospital, and the local public health agency, where it hits additional walls of software.

By the time the patient’s record reaches a contact tracer at a public health agency, it’s usually riddled with errors and missing data, said Eric Bakota, the Harris County Public Health department’s analytics manager. John Smith at 123 State Street might get confused with his cousin John Smith at 456 State Street.

“We got a lot of trash data” Bakota said. 

The process moves even more slowly when data connections don't exist.

During the pandemic, public health workers across the country received records as they always had: By fax. Near the windows overlooking the highway overpass in Houston, the Harris County fax machine spat out so much paper, it blanketed the floor, Bakota said. Stacks of paper test results for people who lived in other cities and counties grew to stand waist-high.  

“We don’t have time to go fumbling around and possibly violate HIPPAA,” the primary federal law protecting patient privacy, said Bakota. “We’re just going to use what’s working already.”

All this data chaos means contact tracers receive the information they need about 10% of the time, Hamilton said. For the other 90%, each investigation starts with a phone call to the doctor who ordered the test, followed by a public records search. This extra work is required simply to find the first patient, never mind all his recent contacts. That work wastes precious hours.

Against a fast-moving pandemic, contact tracers never had a chance.

"When we’re getting millions of records, we’re not necessarily able to spend all that time and energy to try and put all the pieces together," Hamilton said. "We can't protect the health of millions of people if we’re not supported by rapid data systems."

When their computers failed, public health workers applied brute force. Harris County deputized hundreds of workers as contact tracers, Bakota said. To keep social distancing, many people worked in closets.

“Everyone was working 16-hour days. I don’t know why we even went home,” said Scott Jeansonne, who leads Harris County Public Health’s COVID-19 division. “Anytime you see improvement in public heath processes, that’s being fueled by sacrifices of public health staff.”

Barriers: Paperwork, liability, and regulation 

Kenneth Beckman operates a laboratory that hides in plain sight. The University of Minnesota Genomics Center is located inside a campus that sprawls across two city blocks near the western edge of Minneapolis, between the university’s football stadium and a Union Pacific train yard.

In November 2020, Quest Diagnostics or Labcorp — Beckman declines to specify which one — found itself overloaded with samples during a COVID-19 surge. The company’s leaders asked Beckman if his lab could join its network and help balance the load.

Beckman was glad to try. Unlike most academic laboratories, the genomics center lab already had a certificate from the FDA under the Clinical Laboratory Improvement Amendments act, which Beckman figured would make the integration easier.

It didn’t. 

First the university’s computer systems needed to be expanded to handle test orders, results, and patient data streaming in from hundreds of testing sites around the country. Such a large overhaul triggered a full-scale compliance review.

“It’s like they had just acquired a new company. Do you have threat insurance? Can you withstand a hospital-grade IT audit? It’s a questionnaire that’s many hundreds of pages long to make sure you can’t be hacked for ransom attacks,” Beckman said. “If you have a HIPAA violation, it’s $1 million per incident. It’s not trivial.”

This back-end work took three months. By the time it was complete, the crisis had resolved itself, not by an increase in testing capacity, but because the surge ended. So the testing giant decided it didn’t need Beckman’s help after all.

“It’s all this paperwork, regulatory, insurance and liability,” Beckman said. “Those are the problems — not being able to run the test.”

Other laboratory directors that tried to scale up for COVID-19 experienced similar obstacles.

“Everyone dramatically underestimates the pre- and the postanalytical challenges,” said David Peaper, leader of Yale University’s primary COVID-19 testing lab.

Presidents fail

Scott Gottlieb was standing inside the White House early on the morning of Friday March 13, 2020, when an aide to President Donald Trump handed him a FedEx package. Open it, the aide said, giving a mischievous smile. Inside, Gottlieb found two plastic vials filled with enzymes. Gottlieb, a trained medical doctor, knew what the vials were for: to preserve mucus from a nasal swab until the sample could be tested in a laboratory.

“These two test kits, I was told, were for the president,” Gottlieb wrote in his book, "Uncontrolled Spread."

After Gottlieb briefed the president in the Oval Office that day, Trump gave a press conference in the Rose Garden where he declared COVID-19 a national emergency. He announced a partnership with Quest Diagnostics, LabCorp, and test machine manufacturers, but didn’t mention any details. Quest Diagnostics CEO Steve Rusckowski said the company would deliver new, high-throughput genetic testing machines into its laboratories that weekend.

A few minutes later, Trump appeared to question the need to increase testing at all.

“Again, we don’t want everybody taking this test; it’s totally unnecessary,” he said. “And this will pass. This will pass through, and we’re going to be even stronger for it.” 

Looking back on that stressful day, Gottlieb now thinks it was already too late.

“This was a policy lapse,” he said during an interview with The Record and USA Today. “Someone needed to call the commercial manufacturers in January [2020] to say we need you to get a high-throughput platform up and running.”

The Rose Garden press conference established three patterns of federal response to the pandemic: Presidents of both parties would claim to take the nation’s genetic testing emergency seriously. But they would fail to create a national plan for it, and instead abdicate their responsibility to Labcorp and Quest.

“We don’t have a regional integration system” for COVID-19 tests and data, said David Perlin of Hackensack Meridian Health. “We certainly don’t have a national integration system. If we did, you’d know in a flash what our COVID-19 status was. And we don’t know that.”

Logistics collapse

Early in the pandemic, Quest and Labcorp’s vast logistics networks crumbled. There were several reasons for this, said Mara Aspinall, an advisor to the Rockefeller Foundation. In many states, the same emergency orders that closed bars and sporting events also applied to Quest and Labcorp sample sites. In areas without shutdown orders, sites remained open but couldn’t take nasal swabs, because they had the staff and equipment they needed to draw blood, not mucus.

Moreover, the giants’ regular customers simply disappeared, said Robert Michel, editor-in-chief of The Dark Report, a laboratory trade journal. Non-emergency surgeries were cancelled, so hospitals stopped ordering tests. Besides, people who can’t breathe due to COVID-19 don’t call Labcorp or Quest, Michel said. They call their doctor, or go to urgent care or the emergency room to get lab tests.

By the second week of April 2020, total testing volumes at some laboratories dropped by nearly 90% from pre-pandemic levels, according to data compiled by The Dark Report. This created a crisis for Quest and Labcorp: too many COVID samples to be run by their available staff and machines; not enough regular, non-COVID samples to pay the bills. 

Both companies faced financial crisis. Testing volume at Quest labs dropped 40% in March 2020. The company furloughed 4,000 workers. Managers, board members and CEO Steve Rusckowski all took temporary pay cuts. Labcorp’s volume dropped 50%, so the company froze hiring and laid off temporary workers. Altogether, the diagnostics industry lost $2 billion in revenue in early 2020, representing a 14% drop in a single quarter, according to the Federal Reserve Bank of St. Louis.

“If you look at the disadvantages of centralization, you have a lot of volume going though those few labs,” Aspinall said. “If one system goes down, all of a sudden you have a million customers with no results that have to be tested somewhere else. No system is set up for a million new customers in two weeks.”

At smaller labs around the country, excess testing machines and supplies sat unused during the early weeks of the pandemic, said Michel and Mark Birenbaum of the independent laboratory association. This was partly because smaller labs had been purposefully excluded from narrow networks.

“The big labs couldn’t handle the testing,” Birenbaum said, “but early on our labs weren’t getting the specimens, so they couldn’t pitch in to help.”

Quest, Labcorp and the rest of the industry bounced back to post record revenues in 2020. But many industry insiders found it sobering to watch the giants stumble.

“This is a situation where having just two big labs controlling such a large proportion of the industry can create problems in emergency situations," Birenbaum said.

Popups fall down

As the national logistics networks stalled, hospitals and governments were forced to improvise. A few minutes after midnight on a cold morning in March 2020, Kim Gomez stopped her car along a two-lane highway in Paramus, New Jersey. For three days, her fever held steady at 104 degrees. On the fourth day, she decided she needed a COVID-19 test.

“I feel so bad! Like somebody is squeezing my head,” said Gomez, who was third in line for a drive-through testing site in a community college parking lot. “I went to an emergency room. They told me to come here. There’s nowhere else to go!”

By 5 a.m., the line of cars was half a mile long. Processing so many patients took hours, even though each test required just a few seconds. Such delays repeated across the country, as health workers labored to enter patients’ health information into the jury-rigged computer system of each popup site.

In normal times, lines at Labcorp and Quest are short. That’s because both companies use online scheduling systems to match patient loads with available staff and supplies. The testing giants also get all the medical data they need straight from patients’ doctors.

But popup sites sprang up so quickly, their data systems were built for light duty. Many ran off a single laptop.

“The major laboratories, Labcorp and Quest, they’re tremendously automated. They have strong data systems but even they were caught off guard,” Aspinall said. “It sounds like not a big deal. But when you get a million samples and you’re only set up for five thousand, that’s a big deal."

Improvised computer and logistics systems also couldn’t handle the volume or sophistication of modern medical records.

“The major labs have quality safeguards built in, including barcodes that are shared with their existing distribution channels and courier networks,” Aspinall said. “All of a sudden you had counties, cities, pharmacies, none of which had any history of taking very intricate samples, in huge volumes, and labelling them. And they were sending these samples to labs, many of which they had never worked with before.” 

After a patient’s test is performed by Quest and Labcorp, the result is communicated to all the patient’s doctors, and to public health agencies. At popup sites, that didn’t happen, Hamilton said. In 90% of cases reported to public health agencies, contact tracers didn’t receive the information they needed to begin their investigations, according to a survey by Hamilton’s group.

The result was that popup sites helped keep individuals healthy. But to protect public health — perhaps the most important reason to test for COVID-19 in the first place — they contributed little of value.

“Many of the labs that emerged into this space had never reported to public health before. They didn’t how,” Hamilton said. “Also, when they did know, it wasn’t as though public health was a priority.”

Doctors in a trap

Doctors and hospitals had the opposite problem. Their computers were too heavy and hardwired to change. Even as turnaround times at Quest and Labcorp stretched out to 12 or 15 days, doctors continued sending them new test orders.

“If that result takes a week to get back, what good is that?” said Jennifer Nuzzo at Johns Hopkins.

This sounds illogical, until one considers the alternative.

To go around Quest and Labcorp, each doctor would need to negotiate a contract with a laboratory with excess COVID-19 testing capacity, as well as data and logistics systems that comply with federal privacy law.

Since the new lab wouldn’t appear as an option in the doctor’s computer template, the doctor would write out every test order by hand. The paper form would be affixed to the plastic sample tube, either by a rubber band or inside a plastic baggie, said Michelle Meigs with the public health lab association. Next, the doctor would need to find and hire a HIPAA-compliant courier service to drive the sample to the lab, and drive the results back.

Even in normal times, no doctor has time for that.

“Providers are super busy,” said Klausner at University of Southern California. “If they want to send it to another lab that’s not already welded into the system, they have to do what’s called a ‘send-out test.’ It’s a manual thing. The whole system freezes. So the provider is strongly biased to not send to a new lab, even though the existing lab may have a seven- to fourteen-day day backlog.”

In some situations, hardwired medical records systems add unnecessary burdens to labs that are already inundated.

Durant describes a common experience in which his lab at Yale sees a patient whose medical record indicates he’s received two recent COVID-19 tests. Perhaps both tests were performed by Yale. Or maybe one test happened at Yale, but the other was run by an Abbott machine inside a CVS pharmacy. That’s information doctors at Yale would like to know, Durant said, because research suggests tests by Abbott machines may be less sensitive.

Data silos operated by hospitals, laboratories and doctors often don’t record the type of testing platform used, however. If they do, Durant said, that data often drops out as the record passes from one silo to the next. 

When doctors don’t know the answer to a question, they order another test, Durant said. This complex problem is actually one of the simplest ways in which dysfunctional silos slow testing down, and limit total test supply.

“We can punch a hole in the wall, and we can peek through,” Durant said, describing how the software stack at Yale interacts with stacks operated by other health institutions. “But I don’t know what happens behind the scenes at CVS. If we don’t have access to the data, then we end up duplicating work.”

Why did corporations fail?

On the day of his Rose Garden press conference, Trump’s decision to rely on the "blood brothers" for the bulk of the nation’s COVID-19 testing made sense. Only Labcorp and Quest possessed the sample site networks, logistics operations, big laboratories, and high-throuhput machines we needed in a pandemic. And after decades of borrowing money to acquire their rivals, only Labcorp and Quest had the borrowing power and relationships with Wall Street banks to buy expensive, high-throughput test machines on credit.

“The consolidation in the industry got so that when COVID-19 hit, there were few other labs with the resources to invest in the costly equipment needed to do PCR testing,” said Mark Birenbaum of the independent laboratory trade group. “At the onset of the pandemic, they couldn’t take that risk.”

But even Labcorp and Quest have limits to how many test machines they can afford. As publicly traded companies that must return profits to shareholders, they can’t invest tens of millions of dollars in testing equipment built to last a decade for a pandemic that may end in months.

What was needed, experts including Aspinall, Gottlieb and Perlin told policymakers, was a unified national plan. Only the federal government can subsidize manufacturers to build more PCR machines, and laboratories to buy them.

That never happened.

“If it’s going to be gone by April [2020], they’re not going to invest in it. So they didn’t,” Perlin said of lab directors’ thinking early in the pandemic. “So it fell on folks like myself.”

Laboratories across the United States, including Labcorp and Quest, did scale up. But it could never be enough. By March 25, 2020, Quest Diagnostics reported a backlog of 160,000 COVID-19 tests, The New York Times reported. Smaller laboratories also were overwhelmed, so they sent their backlogs to Labcorp and Quest, exacerbating wait times. 

“Quest and Labcorp became the labs of last resort. For everyone,” Durant said.

In June 2020, Quest said in a press release that its average turnaround time for a COVID-19 test was four to six days. In early July, Atlanta Mayor Keisha Lance Bottom said she waited eight days for her family’s results. In mid-July, Labcorp and Quest announced a spike of cases in the South and West was straining their systems. Additional surges in testing demand, long turnaround times, and spikes in COVID-19 deaths were reported in November 2020, the spring and fall of 2021, plus the Omicron surge, which caused long waits for results in the Northeast throughout the holidays and into January 2022.

“If you step back and look at our case fatalities, it’s just insane. It’s incomprehensible to me,” Perlin said. “We haven’t bought into a national strategy to protect each other. And until we do that, we’re going to be in the same place when the next thing comes.”

The delays rendered the results useless, both for protecting the health of individual patients, and limiting community spread of the disease. Criticism was harsh. Some observers accused Labcorp and Quest of profiteering.

“In Quest and Labcorp, you’ve got a duopoly,” said the economist Paul Romer. “Whenever you’ve got an incumbent with a big monopolized revenue stream, you know they’re going to resist any changes that might threaten that income.”

People with longer experience in the diagnostics industry say the situation was more nuanced.

In October 2021, Bob Roggeman of Quest Diagnostics said the company’s newest lab in New Jersey received regular deliveries of samples from Baltimore. Transfers like this make Quest and Labcorp two of the only entities capable of balancing the testing load between cities getting slammed by COVID-19 and cities where the outbreak is mild.

But absent massive federal subsidies, Gottlieb said, no private company can afford to spend hundreds of millions of dollars buying extra test machines, building bigger labs, or investing in higher throughput computers and logistics operations, all of which sit idle – generating zero revenue – until the excess capacity is needed in response to the next pandemic.  

“It was a no-win situation” for Labcorp and Quest, said Aspinall, the Rockefeller Foundation advisor. “They couldn’t handle the demand. And they couldn’t say no.”

The Omicron surge showed the limitations of a private system operating on its own, without government support. Throughout the holidays and into January 2022, CityMD walk-in clinics in New York City warned that due to laboratory backlogs, the average patient would have to wait five days for a COVID-19 test result. CityMD sends its samples to Quest Diagnostics for testing, said Michelle Maron, a Quest spokeswoman.

But it appeared that Quest’s vaunted national network did little to help the situation. Quest Air rarely flew to or from Teterboro airport during the Omicron surge, according to flight tracking websites. This suggests any load balancing that occurred was accomplished using vans to transport backlogged samples to Quest’s smaller labs in the Northeast, which were experiencing Omicron surges of their own, rather than to the company’s mega-labs in other regions where the surge hadn’t yet arrived, including ones in Lenexa, Kansas, and San Juan Capistrano, California.

Testing experts say this isn’t Quest’s fault. Rather, it’s a failure of public leadership, from the president down.

“I’m looking at people waiting in lines for three blocks waiting to be tested,” David Perlin said in January 2022, as the latest surge died down. “Why is that? Everybody is overwhelmed. We don’t really have surge capacity right now.”

Conclusion

'We knew what a disaster it was'

What to do? People who work in the scattered, dysfunctional landscape of diagnostic tests have ideas for how to fix it, but no confidence that politicians or the public are listening. One obvious suggestion most experts cite is nationalized healthcare. With a single federal agency paying all the bills, the standalone silos of hospitals and laboratories would lose the incentive to build walled-off kingdoms. They’d be forced to use a common computer system, with uniform rules about how data should be arranged and sent.

“The problem isn’t being able to run the test. The problem is we don’t have a national healthcare system,” said Kenneth Beckman, the lab director at the University of Minnesota. “There needed to be a central authority to take care of regulation, to establish best practices, and to cover your liability and insurance. Only a national healthcare system could have done that."

A smaller but related proposal is to assign every American a unique medical identification number. Both ideas were debated in 1993 in a healthcare reform package led by Hillary Clinton that came to be called “Hillarycare.” Both were roundly defeated. Neither seems politically feasible in the current climate.

“If everybody had a unique medical identification number, maybe we wouldn’t need some of those additional pieces of information with every lab result. We would have the key,” said Janet Hamilton, the Council of State and Territorial Epidemiologists' executive director. “But in this country, we don’t have the key.”

For decades, doctors and health experts have called on Congress to radically increase spending on public health. The CDC’s preparedness and crisis response programs received $858 million in 2020, a 50% reduction over the previous decade, according to the Trust for America’s Health, a nonprofit think tank. The Hospital Preparedness Program, the federal government’s only effort to help regional hospitals prepare for emergency, saw its budget drop from $515 million in 2004 to $275.5 million the year the pandemic struck. Funding from the CDC to help state and local public health agencies prepare for emergencies dropped by a third over the last decade, to $675 million in 2020.

When the Affordable Care Act was passed by Congress in 2010, it included $2 billion a year for prevention and public health programs. Later bills siphoned money away for other purposes, however, leaving public health programs underfunded by $7.5 billion, according to the trust.  

Before the pandemic, groups including the Association of Public Health Laboratories spent more than a decade lobbying Congress for the money to create a national laboratory system capable of overseeing the testing response to a public health emergency. Congress consistently failed to respond, so the effort lapsed. Only later did the focus shift to the modernizing information systems at public health agencies and laboratories that still depend on fax machines.

“We knew what a disaster it was,” Scott Becker, CEO of the Association of Public Health Laboratories, said of antiquated public health laboratory data systems. “And wow, did that prove to be the case.”

Whatever happens with funding, most testing experts agree that the United States still needs a unified plan to test for the next pandemic. The Trump administration famously ignored a pandemic response plan prepared by President Obama’s team. The Biden administration has continued Trump’s mistake, said experts including Emily Gurley and Jennifer Nuzzo of Johns Hopkins University.

“The problem was we never developed a national plan that was able to relieve [Quest and Labcorp] of the overwhelming burden they had,” said James Lawler from the University of Nebraska. “This is not a Trump administration issue. The current administration hasn’t done anything at all” to create a new national testing plan, Lawler said.

The federal government could address the testing shortage directly by creating a strategic reserve of test machines, Scott Gottlieb, the former commissioner of the Food and Drug Administration, said. Such a system might cost billions of dollars to create and run, said Gottlieb, who advocates for the idea.

In addition to his medical career, Gottlieb is a conservative political activist, having advised the presidential campaigns of Wisconsin Governor Scott Walker and Donald Trump. After leaving Trump’s administration as FDA director, he returned to his previous job at the American Enterprise Institute, a right-wing think tank. That a leading member of the conservative establishment would suggest billions of dollars a year in new government spending is perhaps an indication that the situation is dire.

Yet for all his connections, Gottlieb sees no movement on his proposal.

“The policy makers are not focused on these structural issues yet,” he said.

Experts who propose smaller efforts meet the same silence. In April 2020, Dr. James Lawler of Nebraska suggested that federal officials create a “Blue Apron”-styled recipe for COVID-19 tests: specific enough to work, broad enough to work across all high-throughput testing platforms. The government never responded, he said.

At the beginning of the pandemic, there were indications Congress might be prepared to take the problem seriously. Public health data systems received $500 million from the 2020 CARES Act, plus about $600 million from subsequent appropriations, Hamilton said.

Experts viewed this as a nice down payment. Others call for even more funding:

• The Trust for America’s Health recommends incremental increases, including $150 million in additional annual funding for the CDC’s public health preparedness response programs, and a boost of $50 million per year for the agency’s center for chronic disease prevention.

• The Public Health Leadership Forum, a planning effort by a nonpartisan nonprofit called Resolve, has proposed a functioning public health system will cost the United States an additional $4.5 billion a year.

• The Rockefeller Foundation argues that simply bringing the nation’s testing infrastructure up to modern standards will cost $75 billion.

President Biden’s original Build Back Better stimulus proposal included $36 billion for this work. His second, scaled-down version called for $16.2 billion. After the Build Back Better initiative failed in Congress, the only remaining proposal to improve public health data systems consisted of $150 million tucked into the Health and Human Services department’s 2022 budget.

“This is what we do to public health. We fund it in a boom-and-bust cycle,” Hamilton said. “We can’t protect the health of millions of people if we’re not supported by rapid data systems.”

All of which means that in year three of the pandemic, Quest Diagnostics and Labcorp remain the nation’s primary backstop for diagnostic testing during a pandemic surge, just as they were before COVID-19. After re-tooling their sample sites to accommodate nasal samples, both companies got their silos of data, logistics and testing working again. Public health agencies, and major hospital chains including Northwell Health in New York and Yale-New Haven Hospital in Connecticut, have scaled up their internal laboratories.

But they still have contracts with Labcorp and Quest for surge capacity. When hospitals and public agencies get overwhelmed, as they may again before this pandemic ends, they will send their excess samples into the duopoly’s networks and pray that, this time, Quest and Labcorp can handle the load.

“Everyone uses them for surge capacity,” Thomas Durant of Yale said.

Through their trade group, the American Clinical Laboratory Association, Quest and Labcorp continue to lobby the Biden Administration for various changes they say would improve the speed and scale of testing. Their proposals include an expansion of subsidies for patients to get tested, and making permanent a series of temporary regulatory changes implemented during the pandemic to allow laboratories greater flexibility in how they run existing tests, and bring new tests to market.

Experts say Quest and Labcorp can do more.

One simple step would be to force all labs to tell the federal government the number and types of test machines they own, Gottlieb said. This would empower federal and state officials to reduce testing bottlenecks during the next public health emergency by routing samples to labs with unused capacity.  

“I know there were labs that, even in regions where there was overwhelming demand, they weren’t maxed out” during COVID surges, Gottlieb said. “There’s no central place to organize samples and make sure every lab is being used efficiently.”

One big difference since the beginning of the pandemic is that Quest Diagnostics and Labcorp have grown.

COVID-19 presented the greatest revenue bonanza in either company’s 25-year history. At Quest, annual revenues grew by $3 billion during the pandemic, to $10.79 billion in 2021. Labcorp’s market value doubled in a single year, to $24.9 billion in 2021.

Executives at both companies announced they’ll use the money to redouble their acquisitions efforts, and buy still more of their competitors.

“Quest and Labcorp are using money from COVID to continue consolidation,” said Melissa Buttersworth, president of Advanced Strategic Partners, which helps owners of small laboratories prepare their companies for sale to the duopoly. “They’ve really picked up their M&A activity, and they’re very aggressive.”

More revenue for Labcorp and Quest Diagnostics means more consolidation, bigger mega-labs, and fewer independent systems that can handle the load of monkeypox, the next COVID-19 variant outbreak, or the next pandemic.

“They’re private companies,” Beckman said. “It’s not their job to maintain tons of excess capacity for an event that everyone knows is coming.”

And just like before the pandemic, political leaders continue to ignore expert warnings that this is a mistake.

“What we do know is there will be other public health emergencies,” said Aspinall, “and testing cannot be undervalued again.”