Aji Abraham, senior VP of business and network development at Capital BlueCross, said the midsize insurer competes with a lot of larger companies, so it needs to find ways to disrupt business models and stand out. And if it’s looking to justify that substantial valuation-it will have to do so at a vast scale and with an eye to turning a profit.
Theranos, the buzz-generating and controversial lab company founded by entrepreneur Elizabeth Holmes, announced a partnership on Wednesday that will bring their blood tests, which many have called “revolutionary”, to an East Coast state for the first time.
“We found Theranos to be the best lab for our members-they’ve been able to implement their unmatched technology and processes to provide access to accurate, convenient, and low-priced lab testing services”, said Gary St. Hilaire, CEO of Capital BlueCross, in a statement. Lawrence notes that this deal could serve as a precedent for other Blue Cross and Blue Shield insurance companies, which serve more than 100 million people.
As Stacy Lawrence at the industry publication FierceMedicalDevices points out, the deal doesn’t mean that all BlueCross patients will get their tests from Theranos, but it’s likely that the company will be a preferred option, given their cheaper costs compared to other providers.
Biotech startup Theranos notched a regulatory win last week after the Food and Drug Administration (FDA) cleared a new test and analysis system for finding the herpes simplex 1 virus with a single finger prick of blood.
The tests have already been made available direct-to-consumers and to physicians at Walgreens clinics in Palo Alto, California and throughout Arizona. Theranos publishes a “menu” on its website detailing the prices of all of its tests, all of which are at least 50% below the Medicare reimbursement rate, the company says. For example full fertility panels run $35, while simple cholesterol tests are $2.99.
The team at Theranos plans on submitting more lab-developed tests (LDTs) for the agency to review. “As an insurance provider, it is important for us to partner with companies who are using innovation to address and solve the toughest problems in health care”.
Date: July 12, 2015