Clinical Laboratory Testing Volume 2: Key Players for Laboratory Testing, Business Trends and Strategies

Abstract

Clinical laboratory testing is one of the most important sectors of medical care. Although it is generally involved in over 70% of medical diagnoses, it accounts for less than 5% of overall healthcare expenditures. The term clinical laboratory testing usually refers to determining the concentration or activity of a protein, carbohydrate, lipid, electrolyte, enzyme or small molecule in easily collected body fluids such as blood, serum, plasma, urine and saliva. This TriMark Publications report describes the specific segments of the clinical laboratory testing business and the strategies used by laboratory companies to develop new business opportunities. The study presents emerging business practices and analyzes the partnerships and alliances that various key sector players have forged or could forge in the near future. New clinical laboratory business methods are also examined to identify lead positions and potential future growth areas. Moreover, the report profiles leading companies in the clinical laboratory industry, with a primary focus on companies that actively analyze and market laboratory data.

The author of this report is a Ph.D. in biochemistry from the University of Minnesota with mans decades of experience in scientific writing and as a medical industry analyst. He has been a senior director of se cml large regional and national healthcare laboratories. He has over 30 years of experience in laboratory testing and instrument and reagent development technology as a licensed clinical laboraton director, as well as extensive experience in senior level management positions in biotech and niedictil sen ice companies. The editor has a Ph.D. in medicinal chemistry from Medical College of Virginia, Virginia Commonwealth University, with postdoctoral work in clinical assay development and validation conibined with molecular biology, and has worked in small and large pharmaceutical companies in the department of drug safet e aluation to support eflbrts in drug discovery and for commercialization of new chemical entities as drugs for over 15 sears.

Company-specific information is obtained mainly from industry trade publications, academic journals, news and research articles, press releases and corporate websites, as well as annual reports for publicly-held firms. Additionally, sources of infoimation include the non-governmental organi/ations (NGOs) such as the World Health Organization (WHO) and governmental entities like the U.S. Department of Hlealth and Human Services (HHS) and U.S. federal agencies such as the National Institutes of Health (NIH), the Food and Drug Administration (FDA) and the Centers for Disease Control and Prevention(CDC). Where possible and practicable, the most recent data available have been used.

Some of the statistical information was taken from Biotechnology Associates' databases and from TriMark's private data stores. The information in this study was obtained from sources that we believe to be reliable, but we do not guarantee the accuracy or completeness of any information or omission or for the results obtained by the use of such infonnation. Key information from the business literature was used as a basis to conduct dialogue with and obtain expert opinion from market professionals regarding commercial potential and market sizes.

TriMark collects information from hundreds of Database Tables and many comprehensive multi-client research projects, as well as Sector Snapshots that we publish annually. We extract relevant data and analytics from TriMark' s research as part of this data collection.

TriMark uses research publications, journals, magazines, newspapers, newsletters, industry reports, investment research reports, trade and industry association reports, government-affiliated trade releases and other published information as part of its secondary research materials. The information is then analyzed and translated by the Industry Research Group into a TriMark study. The Editorial Group reviews the complete package with product and market forecasts, critical industry trends, threats and opportunities, competitive strategies and market share determinations.

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 Testing Market

• 2.1. Introduction
• 2.2. Independent Clinical Labs
  • 2.2.1. Key Players for Independent Clinical Labs
• 2.3. Medical Expenditures
• 2.4. Medicare Clinical Lab Services Spending Trends

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. Barriers to Successful Clinical Laboratory Operations
  • 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. Vitamin D Testing
• 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. Point of Care Testing
• 4.14. Monitoring Testing
• 4.15. Anatomic Pathology
• 4.16. Immunodiagnostics
• 4.17. Opiate Testing

5. Important Clinical Lab Testing Technology Trends

• 5.1. Technology Platform Innovations in Clinical Lab 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)
  • 5.7.6. Specimen Tracking and Processing

6. Business Trends in the Clinical Laboratory Testing Sector

• 6.1. Key Developments
• 6.2. Sector Consolidation
• 6.3. Acquisition Pricing
• 6.4. Hospital Lab Competition Threats
• 6.5. Acquisition, License Agreements, Internal Development and Partnerships
• 6.6. Merger, Acquisition and Partnering Activities in the Clinical Lab Testing Industry
• 6.7. Comparison of Quest and LabCorp
  • 6.7.1. Acquisitions
  • 6.7.2. Quest's Growth
  • 6.7.3. Laboratory Corporation of America
  • 6.7.4. LabCorp's Growth
  • 6.7.5. Competitive Advantages of National Labs like Quest and LabCorp
  • 6.7.6. National Managed Care Companies
  • 6.7.7. Billing and Collection Management
  • 6.7.8. Lower Reagent and Supply Costs
  • 6.7.9. Esoteric Testing Capabilities
  • 6.7.10. Ability to Invest in Web-based Connectivity Solutions
  • 6.7.11. Competitive Disadvantages of Quest and LabCorp
  • 6.7.12. Difficulties with Turnaround Times and Stat Services
  • 6.7.13. Physician-Laboratory Communication
  • 6.7.14. Specimen Pickup Scheduling Inflexibility
• 6.8. Regulation of Clinical Laboratory Operations
  • 6.8.1. CLIA and State Regulations
  • 6.8.2. Drug Testing
  • 6.8.3. Controlled Substances
  • 6.8.4. Medical Waste, Hazardous Waste and Radioactive Materials
  • 6.8.5. FDA
  • 6.8.6. Occupational Safety
  • 6.8.7. Specimen Transportation
  • 6.8.8. Corporate Practice of Medicine
• 6.9. Hospital Outreach Programs
• 6.10. Supply Chain and GPO Contracting
• 6.11. Specialty Labs
• 6.12. Expansion of Hospital-based Labs and Hospital Outreach Programs
• 6.13. Managed Care

7. Company Profiles

• 7.1. ACM Medical Laboratory
• 7.2. Alere
• 7.3. American Esoteric Laboratories (Sonic Healthcare)
• 7.4. American Pathology Partners
• 7.5. AmeriPath (Quest)
• 7.6. ARUP Laboratories
• 7.7. Athena Diagnostics
• 7.8. Aurora Diagnostics
• 7.9. Bio-Reference Laboratories, Inc.
• 7.10. BioTech MedLab
• 7.11. Caris Diagnostics
• 7.12. CBLPath
• 7.13. Centrex Clinical Laboratories
• 7.14. Clarient, Inc.
• 7.15. Clinical Reference Laboratory
• 7.16. Clongen Laboratories, LLC
• 7.17. CompuNet Clinical Laboratories
• 7.18. EndoChoice Pathways
• 7.19. Enzo Biochem, Inc.
• 7.20. Esoterix (LabCorp)
• 7.21. Exagen Diagnostics
• 7.22. Geneva Laboratories
• 7.23. Genomic Health, Inc.
• 7.24. Genzyme
• 7.25. IBT Laboratories
• 7.26. Integrated Regional Laboratories (IRL)
• 7.27. LabCorp
• 7.28. MEDTOX Scientific, Inc.
• 7.29. Meriter Health Services
• 7.30. Mid America Clinical Laboratories (MACL)
• 7.31. Monogram Biosciences, Inc.
• 7.32. Myriad Genetics, Inc.
• 7.33. National Jewish Medical and Research Center
• 7.34. Parkway Clinical Laboratories
• 7.35. Pathology, Inc.
• 7.36. Predictive Biosciences
• 7.37. Psychemedics Corporation
• 7.38. Quest Diagnostics, Inc.
• 7.39. RDL Reference Laboratory
• 7.40. Satellite Laboratory Services
• 7.41. Signal Genetics
• 7.42. Solstas Lab Partners
• 7.43. Sonic Healthcare
• 7.44. Spectra

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
  • 8.14.5. Billing Practices
• 8.15. Digital Pathology
• 8.16. Pathology Laboratory Trends

9. Key Clinical Lab Business Strategies

• 9.1. Strategy 1: Acquisitions
• 9.2. Strategy 2: Parallel Businesses Development
• 9.3. Strategy 3: Larger Labs
• 9.4. Strategy 4: Develop Specialty Areas of Testing
• 9.5. Strategy 5: Marketing
• 9.6. Strategy 6: Capitalize on a Unique Position within the Clinical Testing Market
• 9.7. Strategy 7: Lead in Providing Medical Information
• 9.8. Strategy 8: Scientific Differentiation
• 9.9. Strategy 9: Drive Quality
• 9.10. Strategy 10: Deliver a Superior Patient Experience

• Appendix 1: Reference Laboratory Directory
• Appendix 2: Current List of Laboratories which Meet Minimum Standards to Engage in Urine Drug Testing for Federal Agencies
• Appendix 3: FDA/CLIA - Currently Waived Analytes

• Figure 2.1: Medicare Part B Expenditures, 2005-2016
• Figure 2.2: Part B Spending on Clinical Laboratory Services, 1991-2007
• Figure 3.1: Lab Revenue by Lab Type
• Figure 3.2: Lab Revenue by Test Type
• Figure 3.3: Number of New Tests Granted CLIA-waived Status, 2000-2008
• Figure 3.4: High-Volume Waived Tests
• Figure 5.1: Percentage of Physicians in Practices with IT for Specific Clinical Activities, 2000-2005
• Figure 6.1: Quest Revenue Breakdown
• Figure 6.2: Revenue for Quest Diagnostics, 2000-2011
• Figure 6.3: Revenue for LabCorp, 2000-2011
• Figure 8.1: Reimbursement Distribution for Clinical Lab Service Payers

• Table 2.1: Independent Clinical Laboratories by Market Capitalization
• Table 2.2: Top Clinical Laboratory Testing Analytes, 2011
• Table 2.3: Drivers for Overall Medicare Spending
• Table 2.4: Medicare Part B Expenditures, 1970-2011
• Table 2.5: Future Projections of Medicare Part B Expenditures 2012-2080
• Table 2.6: Medicare Spending for Clinical Lab Services, 2000-2009
• Table 2.7: Drivers for Medicare Clinical Laboratory Spending
• Table 3.1: U.S. Clinical Laboratory Testing Sector Revenue, 2005-2016
• Table 3.2: U.S. Clinical Laboratory Testing Sector Segments, 2011
• Table 3.3: Esoteric Tests Performed in the Clinical Laboratory
• Table 3.4: Growth Rates of Test Types
• Table 3.5: Drivers of Clinical Lab Testing Volume
• Table 3.6: Independent Commercial Laboratory Testing Test Volume, 2005-2016
• Table 3.7: Lab Tests Performed in Physicians Offices
• Table 3.8: Revenue at Leading Commercial Lab Companies, 2011
• Table 3.9: Payer Group Percentage of Total Volume of Requisitions and Net Revenues
• Table 3.10: Barriers to Successful Clinical Lab Operations
• Table 5.1: Applications for Wireless LAN Technology
• Table 6.1: Clinical Laboratory M&A Activity, 2010-2012
• Table 6.2: Major Managed Care Players for Clinical Laboratory Services
• Table 6.3: Drivers for Managed Care Spending for Clinical Laboratory Services
• Table 6.4: Revenue for Quest Diagnostics, 2000-2011
• Table 6.5: Revenue for LabCorp, 2000-2011
• Table 6.6: Clinical Lab Quality Assurance Programs
• Table 7.1: Myriad Genetics' Laboratory Testing Menu
• Table 8.1: Key Elements of Clinical Lab Service
• Table 8.2: Key Competitive Activities for Clinical Lab Service
• Table 8.3: Challenges to the Clinical Lab Testing Industry
• Table 8.4: Medicare Billing Guidelines for Multi-channel Clinical Laboratory Tests
• Table 8.5: Factors for Estimating Collectibility for Clinical Lab Services
• Table 8.6: Classes of Lab Service Payers
• Table 8.7: U.S. Revenue Forecasts for POCT Market, 2008-2018
• Table 8.8: Billing Difficulties Required of Clinical Labs to Bill Third-Party Payers
• Table 8.9: Drivers for Operation of In-Office Pathology Labs
• Table 8.10: Barriers for Operation of In-Office Pathology Labs