With 180 million people spending more than 20 billion yuan a month, who is the biggest winner of normalized nucleic acid testing?

Text/ Xin Na Wang Teng

Editor / Wang Xiao

Photo by Wang Teng, a nucleic acid test site in Chaoyang District, Beijing, on May 6

"Either you're doing nucleic acid testing, or you're on your way to doing nucleic acid." On May 6, 2022, a circle of friends of a Beijing resident wrote that this is also a portrayal of more and more people in Beijing, Shanghai and other places.

According to the incomplete statistics of "Finance and Economics Great Health", six cities have begun to normalize nucleic acid testing, namely Beijing, Shanghai, Hangzhou, Shenyang, Wuhu and Dalian. These cities generally require citizens to be tested at regular intervals, and even become a necessary proof of travel and access to public places.

"This is the current way to deal with the comprehensive, medium- and long-term social cost of the Aumechluson epidemic prevention method." Cao Heping, a professor at Peking University's School of Economics, said in an interview.

According to an estimate by Soochow Securities, as of April 30, China spent 21.6 billion yuan on normalized nucleic acid testing in one month.

However, can setting up more nucleic acid testing points become a long-term business?

Street corner shops, from housing agents to nucleic acid testing points

At about two o'clock in the afternoon of May 6, there was a long queue at a nucleic acid testing point near the Yacheng Yili community in Beijing's Chaoyang District. "Finance and Economics Great Health" observed that within an hour, the team has maintained about 50 people, most of them because of the health treasure pop-up window, to do nucleic acid tests.

This façade house, located at the intersection of two roads, was previously a housing rental company. After 2022, it became a nucleic acid testing point. The plaque is a simple and straightforward "nucleic acid detection point" five words, endowed with eye-catching red and yellow.

Recently, the "Beijing Health Treasure" of the five categories of people will be popped up. For example, those who need to conduct risk screening; those who have not completed nucleic acid testing within the specified time. Specific personnel need to complete nucleic acid testing, and the "Beijing Health Treasure" will automatically release the pop-up window after querying the negative report.

"Before, when the epidemic was not serious, one or two hundred people were checked every day, and in the recent past, one or two thousand people were checked every day." A staff member of a nucleic acid testing site on Caiman Street in Beijing said.

According to public information, as of January 29, there were 400 fixed sampling points for nucleic acid testing in Beijing, of which 91 could provide mixed inspection services. By May 7, the comprehensive statistics of "Finance and Economics" published information on the Beijing Municipal Government Network found that the fixed nucleic acid sampling points had doubled to 989.

However, these sampling points are still not enough to cope with Beijing's previous regional nucleic acid testing, and in order to cope with the current epidemic, Beijing has set up a large number of temporary sampling points. On May 3, 4 and 5, Beijing carried out three consecutive rounds of regional nucleic acid screening. In the first round on May 3, 9,266 sampling points, 22,000 sampling stations, 44,000 sampling personnel, 130,000 auxiliary support personnel, and a total of 19.92 million samples were set up. Many of these temporary sampling sites are located in or around the community, and medical staff are selected by the community health center or jurisdiction to conduct testing.

In the parking lot opposite the west gate of Beijing Chaoyang Joy City, it is close to the bus platform and the no. 6 money of the subway, and there are many shopping malls and office buildings around it. There is also a free nucleic acid sampling point here, paid for by the government, which is currently dedicated to large-scale mixed mining. Compared to other sampling points, this sampling point has a larger layout, with registration windows and sampling windows, respectively, and a dedicated staff rest area. The sampling site was operated by a third-party medical laboratory with six staff members on site that day.

The government's large-scale nucleic acid testing is mainly based on mixed mining, generally 10 people and one mixed mining. According to the estimation of a person in charge of a third-party medical laboratory, a laboratory of 30 to 40 people, working in two shifts, can only reach 10,000 tests per day.

As of April 17, 2022, statistics from the National Health Commission show that a total of 13,100 medical and health institutions in China have testing capacity, with a testing capacity of 51.65 million tubes per day. A year ago, that number was 1.26 million tubes/day.

In the view of Liang Wannian, head of the expert group of the National Health Commission's Leading Group for Epidemic Response and Handling, to organize a nucleic acid test and implement a certain anti-epidemic measure, it requires systematic and thorough resource allocation and mobilization and coordination to be effectively completed. He analyzed at a press conference on April 29 that the nucleic acid testing capacity of cities with a population of 1 million people and the nucleic acid testing capacity of cities with a population of 25 million are different. When the detection capacity is insufficient, the time will be long, and when it is enough, it may be completed in 24 hours. So, this piece is a challenge.

Covid-19 has completely changed the scale of nucleic acid testing, and previously only a small number of third-party medical laboratories and public hospital laboratories could do it.

Since 2020, a total of 45.66 billion yuan has been invested in the central budget for the construction of major epidemic treatment bases and national regional medical centers; in 2021, 30 billion yuan will be arranged to support the construction of provincial, municipal and county three-level disease control and national regional medical centers. Among them, it includes improving inspection and testing capabilities.

For example, all medical and health institutions above the second level and community health service centers have set up nucleic acid sampling services. Among them, medical and health institutions with wards or fever clinics will provide 24-hour testing services. In addition, eligible pharmacies, health stations, etc. will also guide the provision of 24-hour nucleic acid testing services.

In April 2022, there were 66 third-party nucleic acid testing institutions in the category of medical institutions that passed the audit in Beijing.

A relevant person in charge of a third-party medical laboratory said that in cities that now implement normalized nucleic acid testing, the government will require the establishment of additional nucleic acid testing points to improve sampling capacity.

Chen Shiyan, deputy director of the Shanghai Municipal Development and Reform Commission, informed at the press conference that as of the evening of May 4, more than 4,500 nucleic acid points had been opened. In the future, a number of convenient sampling points including fixed sampling points, convenient sampling points and mobile sampling points will be laid out in residential communities, office spaces, enterprise parks, subway stations, subway stations and other areas, and actively build a "15-minute nucleic acid service circle".

Hangzhou stipulates that no less than 10,000 sampling points will be set up in the whole city, and additional sampling points will be added in government agencies, enterprises and institutions, residential quarters, stations, trading markets, hotels, restaurants, schools and other places.

Public data from Shandong Province shows that as of April 30, of the province's total testing capacity, fixed detection capacity accounted for 63.5%, mobile detection capacity accounted for 36.5%.

As for where the testing point is set up, the person in charge of the above-mentioned third-party medical laboratory said that priority will be given to the new nucleic acid testing point where the flow of people is large, but it is not particularly large, and there is enough empty space next to it for queuing. "Now the government wants to have more testing points, and the specific location is determined by ourselves, and then the application can be applied."

It can cost tens of billions of dollars per month for testing

A nucleic acid sampling point operated by a third-party medical laboratory in Beijing, open 12 hours a day from 8:30 a.m. to 20:30 a.m., provides free testing, and samples an average of about 2,000 people per day.

The person in charge of the scene told "Finance and Economics Great Health" that the testing fee here is settled by the government, and the bill is paid by the street after the bill is sent to the street. At present, single mining is temporarily suspended, and the government pays mixed mining 6 yuan / person.

The staff at this checkpoint worked two shifts and there was no overtime pay. The person in charge of the above-mentioned third-party medical laboratory said that the laboratory where he is located settles the salary for the nurses according to the prescribed length of time, and if the working hours increase due to the serious epidemic, overtime pay will be appropriately given.

On May 3, Li Ang, deputy director of the Beijing Municipal Health Commission, said at a press conference that on May 3, 4 and 5, Beijing carried out nucleic acid screening in key areas and key populations in 5 districts of Mentougou, Pinggu, Huairou, Miyun and Yanqing, and the remaining 12 districts carried out three consecutive rounds of regional nucleic acid screening.

According to the government's latest guidance price of 3.4 yuan, the permanent population of these 12 districts that carried out three rounds of screening is about 19.72 million. Assuming that large-scale nucleic acid testing adopts 10:1 mixed inspection measures, the cost of three rounds of testing is about 20 million yuan.

According to the information reported by the Shanghai Health Commission, Shanghai has carried out a zoning and grading "antigen + nucleic acid" combination screening for the sealing and control area, the control area and the prevention area since May 1. As of the 6th, the cumulative nucleic acid testing has exceeded 57 million times and the antigen test has exceeded 100 million times.

In Hangzhou, starting from April 28, Hangzhou launched a normalized nucleic acid policy, and residents must have a 48-hour nucleic acid test certificate to enter and exit. Based on Hangzhou's current 12.2 million permanent residents, this requires at least more than 6 million nucleic acid testing capacity per day.

As of April 30, 123 cities in 29 provincial-level administrative regions in China were involved in the epidemic, and the population of the cities announced in April that they had been sealed reached 180 million, accounting for 13% of the total population. If it is assumed that the epidemic-related population in the country will maintain this proportion every month in the future, and the normalized nucleic acid testing requires residents in these cities to test nucleic acids every 48 hours at a price of 8 yuan per person, the expenditure required for normalized nucleic acid testing in one month is 21.6 billion yuan.

Even if it is now reduced to 3.4 yuan, the expenditure on normalized nucleic acid testing will be nearly 10 billion yuan in one month.

Chaining checkpoints is the only way out?

The cost of a nucleic acid testing site is mainly manual.

If you look at the hardware investment alone, a sampling point has two pavilions is enough, one for sampling registration, one for sampling, plus air conditioning and other facilities, the overall cost is about 20,000 yuan.

According to the person in charge of the above-mentioned medical laboratory, a sampling point must employ at least two nurses, a security guard, plus three sets of protective clothing and other consumables a day, and the transfer vehicle will cost more than 200 yuan at a time, and the cost per day will be about 2,000 yuan.

The mixed mining fee is 3.4 yuan, a sampling point that is only for the government, and at least 2,000 people must be sampled every day to keep the cost. For a sampling point, this challenge is not small. For example, the nucleic acid sampling point on Chaoyang North Road only reached 1,000 or 2,000 people per day during the Most Intense May Day period.

The price paid for nucleic acid testing at own expense is higher, which is 19.7 yuan / person. According to the Beijing Municipal Medical Insurance Bureau, a single dose of 19.7 yuan is the highest government guidance price, and the testing agency must not float, but it can be adjusted according to its own situation, and the floating range is not limited. For those who simply conduct nucleic acid testing, no outpatient medical service fee will be charged.

The on-site staff of the above-mentioned nucleic acid testing point in Chaoyang Caiman Street, Beijing, told "Finance and Economics Health" that the nucleic acid testing is now divided into free periods + self-funded periods. Free need to make an appointment through the relevant public account to the free testing period, non-scheduled free testing customers need to scan the code, register, pay for sampling on the spot, 19.7 yuan / person.

The nucleic acid testing point on the street corner near Beijing's Yacheng Yili community is a fixed façade house, and the cost input is relatively higher. The nucleic acid testing site, operated by the Beijing Li Infant Maternity Hospital, came up with the idea of raising the price of the test at a rate of 35 yuan per person.

At about two o'clock in the afternoon of May 6, a resident who was queuing up to do nucleic acid told Caijing Health that "the first two days of this testing point charged 24 yuan per person, and the price increased in these two days." At the test point there is a price announcement that is 35 yuan per person. As of press time, Beijing Li Infant Maternity Hospital has not responded to questions about the price of nucleic acid testing.

As of May 7, the comprehensive statistics of Caijing Dajian found that there were 63 sampling points in Beijing that provided 24-hour service, accounting for about 6.37% of the total number of sampling points. This is less than the 66 24-hour service sampling points in January.

For operators, providing 24-hour service may increase the sample size, but the cost will only be higher. The head of the third-party laboratory said that to hire more people, the cost is multiplied, and he does not plan to set up a 24-hour nucleic acid point.

Currently, Beijing has 19 24-hour sampling sites set up by 18 different third-party medical laboratories. In fact, for most third-party medical testing laboratories, the size of the market does not mean that they can make money.

However, "volume-for-price" can still reap the benefits. In the view of Wang Haijiao, managing partner of Gao Tejia Investment, the head company with a market share of more than 10% is still profitable to do nucleic acid testing products. Companies with a market share of only 1% or 1 in 1,000 will exit the market because they have no profit.

On May 6, Mou Shanyong, deputy director of the Shandong Provincial Health Commission, said at a press conference that as of April 30, the maximum daily nucleic acid testing capacity in Shandong Province reached 7.477 million tubes, of which public medical and health institutions (medical institutions, disease control institutions) accounted for 85.5%, and third-party institutions accounted for 14.5%.

At present, there are more than 1,000 third-party medical laboratories in China, but about 70% of the ICL market is in the hands of the first four companies. According to haitong securities analysis, Jinyu Medical (603882. SH) has a market share of 34%.

By the end of 2021, Jinyu Medical has built 39 medical laboratories and cooperated in 670 regional laboratories, distributed in more than 700 cities across the country. Since the COVID-19 pandemic, its performance has been impressive. In 2020, Jinyu Medical achieved operating income of 11.943 billion yuan, an increase of 44.88% year-on-year, and net profit attributable to the mother of 2.220 billion yuan, an increase of 47.03% year-on-year; in the first quarter of 2022, the revenue and net profit attributable to the mother continued to maintain a growth rate of more than 58%.

For most medical laboratories, nucleic acid testing has become a business that has had to expand. "The price of nucleic acid testing is too low, and if you don't build more nucleic acid points, you won't be able to reach the scale of testing and you won't make money." The head of the above-mentioned third-party medical testing laboratory said.

The routine business of these medical laboratories is mainly tumor detection, but under the control of the epidemic, it is difficult for hospitals to see cancer patients, and the task of maintaining the company's revenue can only fall on the income of new crown nucleic acid detection at this stage. The heads of the above-mentioned medical laboratories began to consider building more nucleic acid testing sites. On the one hand, this is the government demand in the normalization of nucleic acid testing, on the other hand, this has become a straw to keep the business.

According to statistics from the National Medical Insurance Bureau, in early April, 30 provinces across the country issued a document to lower government guidance prices. Hunan, Jiangxi and other 23 provinces will be more than one mixed inspection reduced to 8 yuan per person, Shandong, Hebei, Anhui, Inner Mongolia, Guangdong and other 5 provinces downgraded to 6 yuan per person, at this time Xinjiang is the lowest price in the country, 3.5 yuan per person. Now the price of mixed picking in Beijing is 3.4 yuan per serving.

"We have also made calculations in the past few days, and only by reaching a certain scale of testing can we have profits and survive." The person in charge of the above-mentioned inspection room said. If we continue to expand, although there are more channels and the scale of testing will become larger, "whether the scale can be large enough to keep the cost, there is a surplus, and now we are also feeling the stones to cross the river."

Jiang Qingwu, a professor at the School of Public Health of Fudan University, believes that at present, some areas with serious epidemics have temporarily used normalized nucleic acid testing, such as Beijing, Shanghai and other cities. If the current epidemic can be controlled, there is no need to continue normalizing nucleic acid testing.