The future of pathology services, part II
20 November 2019
The future of pathology services, part II
How drones can provide huge cost savings for pathology companies
The challenges of providing rapid, cost-effective pathology services are multifold, as touched upon in a previous blog post. In the developed world, infrastructure challenges are generally fewer and cost is the main barrier to providing everyone with equal access to the most cutting-edge healthcare solutions. This is particularly true in Australia, where the population density is low. Given the cost of driver time and the opex and capex associated with running a fleet of cars, in a pathology network samples are generally collected from patients at healthcare centers and rounded up into batches before being transported to testing labs when it makes the most sense financially. The result of this is that many testing labs run at very inefficiently low utilization rates throughout most of the day. In addition, much of the time the labs may have no idea where the samples are when they will arrive, or what types of samples are going to arrive when they do. Samples may be lost en route, creating further delays for patients to get their results and begin treatment. On-demand transport service with proper tracking for samples and any associated cargo has the potential to revolutionize this model.
Setting up a network, with cost savings from day one
The large initial investment required to set up a drone delivery network, as well as the relatively unknown nature of the technology, mean that setup is usually done in stages. For a pathology company, the first stage involves an initial pilot of a few weeks or a month, as a proof of concept. At this stage, day-to-day operating costs are lower when drones are used on some routes instead of cars. The second stage involves beginning to reimagine the logistics network of the company, looking at integrating into the current network whilst maintaining most of the car fleet alongside the drones. In the third stage, when the viability of the network has been established, deliveries can be made on demand by drone most of the time, meaning that underused labs can be eliminated and the car fleet made smaller, down to the essentials.
Initial cost savings and service improvements
In the initial stages of setting up a network, there is an immediate effect on opex spend, with fuel costs, drivers’ wages, and insurance the main areas where there is room to save. The Swoop Aero aircraft are fully electric and can charge in just 90 minutes, usually using solar energy. Operating the drones requires minimal human input given that they are fully autonomous, and thus the number of people involved in the process is hugely reduced. Insurance costs are lower because we get economies of scale from our global insurance cover, rather than needing to individually ensure each vehicle, its driver, and its contents.
Importantly, monetary savings are not the only immediate advantage. Astronomical improvements in service are another benefit that is reaped from day 1. The incremental cost of transporting individual samples being almost zero means that samples can be transported as they are collected so that they are tested faster and patients can begin the necessary treatment earlier. Pathology companies that use drone transport for their samples can boast better service for a lower cost, an irresistible formula.
Capex savings begin as logistics networks are reimagined
As drones become more central to the logistics of the pathology company, they begin to take over many of the cars that currently serve the network of labs and health centers. Cars are not eliminated and all labs remain open, but the car fleet can be reduced with natural attrition, instead of maintaining or replacing cars at an exorbitant cost. When new technology or testing capabilities are rolled out, these can be limited to the main, central labs, rather than the entire network. The 130km reach of the drone network can be extended with ‘pod swap’ locations so that centralizing capabilities doesn’t mean those in the more remote locations have any less access to the best testing facilities. Expensive and timely upgrades to labs can be cut, and centralization means greater efficiency of resources and a better concentration of expertise.
Optimizing the pathology network
The final stage of the process is fully optimizing the pathology network through a properly integrated drone transport system. Most car routes at this point are replaced by drones, which means that a minimal fleet of cars for emergencies or specific routes only are maintained. The biggest saving comes from the fact that remote or underused labs can be shut down, with all resources centralized at the main testing lab. Staff and equipment can be redistributed for better and more efficient resourcing. The huge savings made from shutting down a number of labs can be channeled into improving the facilities at the central testing locations, maintaining state-of-the-art capabilities, and offering patients an even better service.
Drone transport is the future of better pathology services
The huge cost savings associated with transforming traditional pathology logistics networks using drones are clear. These savings are realized from the very outset of setting up the drone delivery network, with only a few months separating the beginning of the process and the full optimization of the service. Patients benefit from both better service provision and a cheaper service, and pathology companies can focus on doing what they do best, whilst focusing scarce resources in a few central locations and improving the economics of their business model as they do so.