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Editor’s note: This interview was originally published in the March edition of Laboratory Economics newsletter
Tribal Diagnostics, a toxicology laboratory based in Oklahoma City, is one of the few clinical lab companies in the country that is owned and operated by Native Americans. Laboratory Economics recently spoke with its CEO Cory Littlepage.
What is Tribal Diagnostic’s mission?
To enhance health and wellness for Native Americans. Life expectancy for Native Americans is about 5½ years shorter than the rest of the U.S. population, and we’re last in almost every major health category, whether it’s substance abuse, alcohol, Hepatitis C, heart disease, diabetes. Needless to say, there’s a tremendous need to do something about it. We were tired of sitting on sidelines, and since so many healthcare decisions are based on lab results, building a laboratory was the right place to start. With six million Native lives and poor health outcomes at stake, we want to be a part of the solution.
Where did you get the money to invest in Tribal Diagnostics?
We bootstrapped tribal. I am majority owner, and with a couple other individual investors, we self-financed. Being a minority-owned business, it was important for me to protect the integrity of the ownership structure as it gives us credibility in Indian country.
Who do you serve and in what areas?
We’ve been in operation for two years, and we serve both providers in Indian country and non-native providers. In these two years, we have signed up 120 clinics, 300 providers, and eight tribes. We have 25 employees, and I’m proud to say that almost half our staff are Native and 70% are women. We serve primarily Oklahoma, but we are now in eight states, including Missouri, Arkansas, Louisiana, Texas, Maine, Michigan and Washington. Strategically, it’s important for us to win in our own backyard, but we are in the process of expanding both geographically with respect to our test menu.
What is your primary focus?
Right now, it’s on prescription drug monitoring, as many of our staff have lost someone to substance abuse. We are expanding into a full-service lab and will be offering approximately 400 tests by September.
Who is your primary reference lab?
Sonic Healthcare’s Clinical Pathology Laboratories, based in Austin, TX. We just finished our interface with CPL in February.
Are your volumes and revenues growing?
We grew 230% last year and were up 30% in January of this year. I anticipate we’ll grow another couple hundred percent this year. We have a good strategic plan in terms of where we want to grow: there are 573 federally recognized tribes, so there’s a lot of opportunity. We are performing extremely well outside of Indian Country too. Our specimen volume breakdown is about 65% non-native and 35% from Tribal entities. Reimbursement is about 43% Medicare and Medicaid, 46% commercial and 11% uninsured.
What is driving growth?
We have a great team that’s passionate about our mission and enhancing client engagement. We have a strong value proposition and are serious about compliance. Sadly, many toxicology labs have done some atrocious things, undermining the clinical benefits of toxicology testing. We have two former CLIA inspectors on staff, and we don’t contract sales reps, run volume through hospitals, or participate in management service organization (MSO) models. As a young company, I am thrilled with our market access. We have national contracts with UHC, Aetna, Coventry, Medicare, 15 Medicaid plans, 19 BCBS plans, and many regional plans. Our partnerships with insurance carriers give us the opportunity to compete on a level playing field and is beneficial to them as well.
There’s a need for us in Indian country, but we also add value to organizations looking to do business in Indian country. Our team has worked many years both in the private sector and in Indian Country so we can open doors for larger organizations who don’t have Native American strategies. This creates opportunities for larger organizations to increase share, but also adds value to Indian communities who need help.
What impact has the new Medicare CLFS payment system had on Tribal Diagnostics?
Being new, we were fortunate to have the visibility into the new payment system and built our lab accordingly. The poverty level in Indian Country is 27% so we have to operate in a low-cost environment anyway. Operational efficiency is key, so our company footprint is simple—a sales and delivery model. Our organizational structure is, and will remain flat, and other ancillary functions are outsourced. We also focus a lot on continuous improvement and automate as many processes as we can. With reductions to the Medicare fee schedule, we are seeing consolidation in the marketplace and view this as an opportunity to increase share. This year, we will be doubling down and investing in more equipment and hiring more employees. We anticipate employing between 50 and 60 people by end of the year.
Are you aware of the new EKRA law that affects sales reps who work for drug-test monitoring labs?
Yes, we are. The way the law is worded creates some exposure for all labs, so we are in constant contact with our legal team for both clarity and compliance.