Market Report Source

Overview

Clinical laboratory testing is generally categorized as either of two general areas-clinical testing and anatomical pathology testing. Clinical and anatomical pathology procedures are frequently ordered as part of regular physician office visits and hospital admissions in connection with the diagnosis and treatment of illnesses. As such, clinical laboratory analysis is one of the most important sections of medical care.

The purpose of this TriMark Publications report is to describe the specific segments of the clinical laboratory analysis business. The emphasis in this review is on those companies that are actively developing and marketing laboratory data for the clinical setting, including hospitals, independent labs, physician’s offices and miscellaneous clinics. This study concentrates on the clinical laboratory industry in the U.S. It defines the dollar volume of sales in each major market and analyzes the factors that influence the size and the growth of the individual market segments.

The study surveys some of the primary companies known to be marketing clinical laboratory data into the market. Each company is discussed in depth with a section on the history of the company, the product line, business and marketing analysis, and a subjective commentary of the position of the company in its market. The report attempts to answer the questions:

• What companies are the key players?
• What are the opportunities in clinical laboratory testing?
• What is happening with the information revolution?
• What are the development trends?
• Where are the new market growth areas?

This examination reviews the market for clinical laboratory data used in clinical practice. It defines the dollar volume of sales in each major market and analyzes the factors that influence the size and the growth of the individual market segments. The report details market sizes and growth rates for the U.S. and world markets. The study surveys some of the primary companies known to be marketing clinical laboratory data into the market. Each company is discussed in depth with a section on the history of the company, the product line, business and marketing analysis, and a subjective commentary of the position of the company in its market. Unique benefits of this report are:

• In-depth analysis of the major sectors of the clinical laboratory business sector, their size, growth rates and major drivers.
• Presentation of some of the emerging business practices, elucidating the potential areas that could gain traction in this market.
• Analysis of the partnerships and alliances the various key sector players have forged, as well as describing financings of these market participants, giving insight into potential market collaborations.
• Examination of new business methods for clinical laboratories to identify lead positions and potential future growth areas.
• The reader will gain an understanding of key areas of the clinical laboratory testing business.
• New ways to adapt technology innovations and create new revenue streams.
• Sales and marketing strategies that will improve net income.
• Which diagnostic tests are emerging as high profit products.
• Transition to a consumer-based lab model.
• Financial underpinnings of entrepreneurial labs.
• Networking opportunities.
• Insights into the boomer emerging market and their growing expenditures on healthcare.
• Increased merger and acquisition (M&A) activity.
• Shift to preventative medicine.
• Point of care testing.
• Elements of personalized medicine, genetic testing and pharmacogenomics

Table of Contents

1. Overview
1.1 Objectives of the Report
1.2 Methodology
1.3 Scope of the Report
1.4 Executive Summary

2. IVD Clinical Laboratory Market
2.1 Introduction
2.2 Key Players for Independent Clinical Labs
2.3 Reimbursement Pressure
2.4 Medicare Part B Spending Trends
2.5 Cost of Billing and Average Receipts for Commercial Labs
2.6 Hospital Outreach Programs
2.7 Criteria for Selection of Lab Services

3. The Clinical Laboratory Testing Market
3.1 U.S. Market
3.1.1 Hospital-based Clinical Laboratories
3.1.2 Commercial Clinical Laboratory Testing
3.1.3 Physician Office Laboratories (POLs)
3.2 Clinical Lab Testing Key Players
3.2.1 Commercial Clinical Labs
3.2.2 Hospital Lab Collaborative Ventures
3.2.3 Specialty Labs
3.3 Revenue and Reimbursement
3.4 Outlook for Clinical Laboratory Testing
3.4.1 Long-Term Changes
3.4.2 Market Drivers
3.4.3 The Limits to Growth
3.4.4 Key Technologies
3.4.5 Conclusion

4. Hot Sectors in the Clinical Lab Testing Market
4.1 Workplace Drugs-of-Abuse Testing
4.2 Clinical Toxicology
4.3 Clinical Testing for the Pharmaceutical Industry
4.4 Heavy Metal, Trace Element, and Solvent Analyses
4.5 Diabetes (Glucose) Testing
4.6 Molecular Diagnostic Testing
4.7 Cardiac Markers
4.8 Blood Bank Screening
4.9 Genetic Testing
4.10 Predictive Medicine Testing
4.11 Personalized Medicine
4.12 Cancer Testing
4.13 Cell Based Cancer Testing
4.14 Monitoring Technologies
4.15 Anatomic Pathology

5. Important Technology Trends
5.1 Technology Platform Innovations in Point-of-Care Testing
5.2 The New Paradigm
5.3 Consolidated Workstations
5.4 Automation in the Laboratory
5.5 Laboratory Information Systems
5.6 New User-friendly Interface
5.7 Data-Management Issues
5.7.1 Wireless LANs
5.7.2 Data and Workflow Management Systems
5.7.3 Beckman Central Command
5.7.4 Clinical IT More Widely Available in Physician Practices
5.7.5 Physician Electronic Health Records (EHRs)

6. Business Trends in the Clinical Laboratory Analyzer Sector
6.1 Key Developments
6.2 Sector Consolidation
6.3 Acquisition Pricing
6.4 A Closer Look at Six Big Lab Deals
6.5 Acquisition, License Agreements, Internal Development and Partnerships
6.6 Comparison of Quest and LabCorp
6.6.1 Quest
6.6.2 Acquisitions
6.6.3 Quest’s Growth, 2000-2006
6.6.4 Laboratory Corporation of America
6.6.5 LabCorp’s Growth, 2000-2006
6.6.6 Competitive Advantages at Quest and LabCorp
6.6.7 National Managed Care Contracts
6.6.8 Billing and Collection Management
6.6.9 Lower Reagent and Supply Costs
6.6.10 Esoteric Testing Capabilities
6.6.11 Ability to Invest in Web-Based Connectivity Solutions
6.6.12 Competitive Disadvantages of Quest and LabCorp
6.6.13 Difficulties with Turnaround Times and Stat Services
6.6.14 Physician-Laboratory Communication
6.6.15 Specimen Pickup Scheduling Inflexibility
6.7 Regulation of Clinical Laboratory Operations
6.7.1 CLIA and State Regulations
6.7.2 Drug Testing
6.7.3 Controlled Substances
6.7.4 Medical Waste, Hazardous Waste and Radioactive Materials
6.7.5 FDA
6.7.6 Occupational Safety
6.7.7 Specimen Transportation
6.7.8 Corporate Practice of Medicine
6.8 Hospital Outreach Programs
6.9 Supply Chain and GPO Contracting
6.10 Specialty Labs
6.11 Expansion of Hospital-Based Labs and Hospital Outreach Programs
6.12 Managed Care

7. Company Profiles
7.1 ACM Medical Laboratory
7.2 American Esoteric Laboratories
7.3 American Medical Laboratories
7.4 AmeriPath
7.5 ARUP Laboratories
7.6 Athena Diagnostics
7.7 Bio-Reference Laboratories, Inc.
7.8 BioTech Labs
7.9 BioLabs, Inc.
7.10 CBLPath
7.11 Centrex Clinical Laboratories
7.12 Clarient, Inc.
7.13 Clinical Laboratories of Hawaii
7.14 Clinical Reference Laboratory
7.15 Clongen Laboratories
7.16 CompuNet Clinical Laboratories
7.17 Diagnostic Systems Laboratories
7.18 Enzo Biochem, Inc.
7.19 Esoterix
7.20 Focus Diagnostics
7.21 Fresenius Medical Care AG & Co. KGaA
7.22 Geneva Laboratories
7.23 Genomic Health, Inc.
7.24 Genzyme
7.25 IBT Laboratories
7.26 Integrated Regional Laboratories
7.27 LabCorp
7.28 MDS Diagnostic Services
7.29 MEDTOX Scientific, Inc.
7.30 Meriter Health Services
7.31 Mid America Clinical Laboratories
7.32 Monogram Biosciences, Inc.
7.33 Myriad Genetics, Inc.
7.34 National Jewish Medical and Research Center
7.35 Parkway Clinical Laboratories
7.36 Pathology Associates Medical Laboratories
7.37 Psychemedics Corporation
7.38 Quest Diagnostics Incorporated
7.39 RDL Reference Laboratory
7.40 Satellite Laboratory Services
7.41 Spectrum Laboratory Network

8. Clinical Laboratory Testing Sector Trends and Forecasts
8.1 Home Care Analysis
8.2 Non-Traditional Collection for Laboratory Testing
8.3 New Systems for Critical-Care and Near-Patient Testing
8.4 Shift to Preventative Medicine
8.5 Mergers of Diagnostic Companies
8.6 Information Management Advances
8.7 Test Ordering Patterns
8.8 Patient Satisfaction
8.9 Move Away from Central Laboratory
8.10 Healthcare Cost Controls
8.11 Competition for Services
8.12 Drivers and Barriers of Clinical Laboratory Testing
8.13 Confluence of New Technology
8.14 New Trends in Clinical Laboratory Testing
8.14.1 Trends in Reimbursement Practices
8.14.2 Managed Care
8.14.3 Point of Care Testing
8.14.4 Satellite Facilities

LIST OF FIGURES

Figure 2.1: Total Medicare Expenditures, 1995-2005
Figure 2.2: Effect of Medicare Laboratory Fee Schedule Changes on a $10 Test, 1984-2006
Figure 2.3: Part B Spending on Clinical Laboratory Services, 1991-2005
Figure 2.4: Cost Per Billable Test
Figure 2.5: Annual Billable Tests Processed Per FTE
Figure 2.6: Outreach Business Operated at a Freestanding Lab Facility
Figure 2.7: Volume of Dedicated Sales and Marketing Staff for Outreach Business
Figure 2.8: Separately Managed Outreach Billing and Collection
Figure 3.1: Lab Revenue by Lab Type
Figure 3.2: Lab Revenue by Test Type
Figure 3.3: Physician Office Laboratory Revenue, 2000-2006
Figure 3.4: Unweighted Average Medicare Reimbursement for the 10 Most Common POL Tests
Figure 3.5: Total Number of Non-Waived POLs, 2000-2006
Figure 3.6: Number of New Tests Granted CLIA-Waived Status, 2000-2006
Figure 3.7: High-Volume Waived Tests
Figure 4.1: Laboratory Service Revenue from Pap Testing, 1998-2005
Figure 4.2: Percentage of Pap Tests Performed Using Mono-Layer Methods, 1998-2006
Figure 4.3: Market Share for Pap Test Vendors, 2006
Figure 5.1: Percentage of Physicians in Practices with IT for Specific Clinical Activities
Figure 5.2: Office-Based Physicians That Use EHRs, 2001-2005
Figure 6.1: Average Revenue Multiple Paid to Acquire Labs, 2000-2006
Figure 6.2: Hospital Market Share for Outreach Programs

LIST OF TABLES

Table 2.1: Hospital Laboratory Share of Part B Medicare Spending, 1996-2005
Table 2.2: Medicare Spending on Clinical Lab Services, 1991-2005
Table 2.3: Medicare Part B Spending Per Medicare Enrollee, 1998-2005
Table 2.4: Allowed Charges for Top 25 Clinical Laboratory Procedures, 2005
Table 2.5: Washington G-2 Hospital Lab Outreach Survey
Table 3.1: U.S. Clinical Laboratory Testing Market Revenue, 2005-2012
Table 3.2: U.S. Clinical Laboratory Diagnostic Test Market Segments, 2006
Table 3.3: Growth Rates of Test Types
Table 3.4: Independent Commercial Laboratory Testing Test Volume, 2005-2012
Table 3.5: Twenty Most Common Laboratory Tests Offered at Family Physician Offices
Table 3.6: Important New Waived Tests
Table 3.7: Revenue Growth At 14 Publicly-Traded Lab Companies, 2005
Table 3.8: Payer Group wise Percentage of Total Volume of Requisitions and Net Revenues
Table 4.1: Pap Testing at the Largest U.S. Laboratory Companies, 2006
Table 5.1: Applications for Wireless LAN Technology
Table 6.1: Laboratory/Pathology Acquisitions
Table 6.2: Revenue Growth at Quest Diagnostics, 2000-2006
Table 6.3: Revenue Growth at LabCorp, 2000-2006
Table 6.4: LabCorp Revenue from Managed Care Contracts, 2004-2006
Table 6.5: Quest Diagnostics Revenue from Managed Care Contracts, 2004-2006
Table 8.1: Medicare Billing Guidelines for Multi-channel Laboratory Tests
Table 8.2: Targeted Lab Tests and Brief Educational Reminder Messages