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HIDA 2018 Lab Market Report

HIDA 2018 Lab Market Report

Market-At-A-Glance
The laboratory testing market was valued at $79 billion in 2017. The largest market segments were hospital labs (59.1%), independent labs (39.1%), and physician office labs (3.7%).

PAMA Rate Reductions Take Effect
Beginning January 2018, the new clinical laboratory fee schedule (CLFS) was implemented. This cut reimbursement for 75% of tests listed, adding additional financial pressure to laboratories nationwide.

Genetic Testing Market More Than Doubles In Size
The U.S. genetic testing market was valued at $5 billion in 2016, up 150% from 2012. This market is rapidly growing due to both increased demand, and advances in technology. From 2003-2018, a notable subsegment, genomic testing, saw advances in technology reduce the price of genome sequencing from $2.7 billion to just $100. As of 2017, there were 69,100 genetic testing products available. These tests covered 4,500 testable disorders, and nearly 19,000 testable genes.

Reference Lab Giants Plan For Acquisition
Nearly half of the $27 billion reference lab market is dominated by two players, LabCorp and Quest. These two companies performed over 300 million tests in 2017. As of 2018, there were 6,584 independent U.S. lab facilities.

Physician Office Labs Vulnerable To Rate Cuts
Physician office labs (POLs) at just $2.9 billion, represent a fraction of the overall laboratory market but total nearly half of U.S. laboratory facilities. This segment of laboratories received 47% of their revenues from Medicare in 2016. As reimbursement cuts arrive in 2018, this segment is particularly susceptible to changes.


Executive Summary
Laboratory Market Overview
Hospital Lab Market Valued At $47 Billion
Hospital Lab Test Volumes Increase Five Consecutive Quarters
POL Market Grows $300 Million In 2017
POLs Make Up Nearly Half Of U.S. Laboratories
Drug Testing Spurs Growth In Number Of POLs
Quest Diagnostics, LabCorp Are Nearly Half Of Reference Lab Market By Revenue
LabCorp Increases Per Test Revenues
LabCorp Revenues 13.5% Higher Than Quest In 2017
Number Of Post-Acute Labs Up 12.5% From 2011 - 2018
CMS Relies Heavily On Reference Lab Data To Set Rates
Number Of CLFS Codes Up 18.4% From 2010
75% Of Tests On CLFS To Receive Medicare Reimbursement Cuts Under PAMA
20 Largest Payment Increases Under PAMA
20 Largest Payment Decreases Under PAMA
Labs Work To Support Value Based Care Models
Medicare Spending On Lab Testing Down $200M From 2015–2016
Medicare Spending By Test
Drug, Molecular Pathology Testing Have Largest Medicare Spending Decreases
Payment, Coding May Differ Between Test Categories
POLs Most Vulnerable To Changes In Medicare Reimbursement
Lab Tech Investment Benefits Hospitals
Lab Work Most Helpful Aspect Of EHR
Companion Diagnostics Compliment Pharmaceutical Therapy
Precision Medicine Market Projected To Exceed $2 Billion By 2022
Molecular Diagnostics Offer Early Detection
Syndromic Panel Testing: Multiple Diagnoses In One Test
Syndromic Panels May Lower Testing Costs
Majority Of Genetic Tests Are Single-Gene
Rapid Growth In Number Of Genetic Tests
Genetic Testing Could Reduce Treatment Costs
Genomic Testing Costs Rapidly Decline
Top 25 Tests Total 63% Of Medicare Lab Spend
Lab Supplies Purchased Through Distribution
Price Transparency Has No Impact On Clinician Test Ordering
GHX Market Breakdown Of Clinical Laboratory-Related Product Categories Sold Through Distribution
GHX Lists Clinical Laboratory Products Sold Through Distribution
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